Markup & Margin Calculator
Price work to a target profit and stop confusing markup with margin — the mix-up that quietly underprices jobs. Enter your cost with either a markup or a target margin to get the sell price, or enter cost and price to back-solve both percentages. Every result shows profit, margin, and markup side by side so you can see exactly what you’re charging. Free, no login.
Inputs
Pricing
Enter cost and percentage
How this calculator works
This is arithmetic, not a code table — but it is the arithmetic contractors most often get backwards. Markup is profit measured against cost; margin is the same profit measured against price. Because price is the bigger base, the margin percentage is always smaller than the markup that produced it:
price = cost × (1 + markup) · price = cost ÷ (1 − margin) · margin = markup ÷ (1 + markup)
The second formula is the one worth memorizing: to hit a target margin you divide by (1 − margin), never multiply by (1 + margin). Marking up 30% because you want a 30% margin actually delivers 23.1% — across $1M of annual job cost, that prices the work at $1.30M instead of the $1.43M a true 30% margin requires, leaving about $129k out of your bids. The reverse mode back-solves both percentages from a known cost and sell price, which is the fastest way to audit an old bid.
Worked example
A job costs $10,000 in labor, material, and subs. You apply your usual 50% markup:
- Price: 10,000 × 1.50 = $15,000, profit $5,000.
- Margin: 5,000 ÷ 15,000 = 33.33% — the classic pair: 50% markup is only a one-third margin.
- Back-solve: if the target had been a true 35% margin, price = 10,000 ÷ (1 − 0.35) = $15,384.62 — which is a 53.85% markup, not 35%.
Enter the same job above (cost 10,000, “Price from markup”, 50) to reproduce step 1, then switch to “Price from margin” at 35 for step 3.
Reference: markup ↔ margin equivalents
Common markups and the margin each actually delivers — computed by the same engine as the calculator.
| Markup on cost | Resulting margin | Price on $100 cost |
|---|---|---|
| 10% | 9.09% | $110.00 |
| 15% | 13.04% | $115.00 |
| 20% | 16.67% | $120.00 |
| 25% | 20% | $125.00 |
| 30% | 23.08% | $130.00 |
| 40% | 28.57% | $140.00 |
| 50% | 33.33% | $150.00 |
| 100% | 50% | $200.00 |
Frequently asked questions
What is the difference between markup and margin?
Markup is profit as a percentage of cost; margin is the same profit as a percentage of the sell price. Marking up a $10,000 job by 50% gives a $15,000 price — but the $5,000 profit is only 33% of that price, so a 50% markup is a 33% margin. They are two views of the same dollars, and mixing them up always shorts you in the same direction.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup), with both as decimals: a 25% markup is 0.25 ÷ 1.25 = 20% margin. Going the other way, markup = margin ÷ (1 − margin), so a 20% margin requires a 25% markup. The calculator reports both on every result so you never have to convert by hand.
How do I price a job to hit a target margin?
Divide cost by (1 − margin): a $10,000 job priced to a 20% margin sells for 10,000 ÷ 0.80 = $12,500. The classic mistake is multiplying by 1.20 instead, which gives $12,000 — that is a 20% markup but only a 16.7% margin, and the missing $500 comes straight out of profit. The “Price from margin %” mode does the division correctly for you.
Should I bid using markup or margin?
Margin, for the final check — overhead and profit targets are almost always expressed as a percentage of revenue, and margin is the number that lines up with them. Markup is a handy field multiplier (“cost times 1.5”), and there is nothing wrong with building a price that way, as long as you then read the margin the calculator reports and confirm it clears your overhead percentage plus target profit.
Why can’t margin be 100%?
Margin is profit ÷ price, so a 100% margin would mean the price is all profit and the cost is zero — for any real cost, the required price climbs toward infinity as margin approaches 100%. If what you actually mean is “double my money,” that is a 100% markup, which is a 50% margin.
Is this gross margin or net margin?
It is the margin over whatever cost you enter. If you enter direct job cost (labor, material, equipment, subs), the result is gross margin — and it still has to cover overhead before anything is profit. If you load overhead into the cost figure first, the margin you see is closer to net. Either works; just know which cost you typed in.
Method: pure pricing arithmetic — markup = profit ÷ cost, margin = profit ÷ price, price = cost ÷ (1 − margin) for a target margin. No code or standard governs these numbers; what they should be is a business decision. The margin here is gross margin on the direct cost you enter — it still has to cover overhead before any of it is net profit, so know your overhead as a percent of revenue before deciding a “good” margin. At 100% margin the divide-by-zero is real: no finite price gets there.
Pair with the Labor & Crew Cost Estimator to build the burdened cost you’re marking up, or the Regional Cost Index to localize an estimate before pricing it.