Markup calculator
Type what the job costs you and the markup you add, and this gives you the price to charge, the profit on the job, and the margin that price actually leaves. Or turn it round: say the margin you want and it tells you the markup that gets you there. It runs in your browser — nothing is sent anywhere and nothing is saved.
Markup and margin are not the same number
Markup is measured against your cost. Margin is measured against the price. They describe the same dollars from two ends, and because the price is always bigger than the cost, the margin is always the smaller percentage.
Take a job that costs you $1,000 in parts and labor. Add a 25% markup and the price is $1,250, so you make $250. But $250 is 20% of $1,250, not 25% — the margin on that job is 20%. If what you actually wanted was to keep a quarter of every dollar the customer pays, you needed a 33.3% markup and a price of $1,333.
That gap is where a one-person business underprices without noticing. The target gets set as a margin — “I want to keep 25%” — and applied as a markup, and every job comes in a fifth short of the plan.
How the sums work
- Price = cost × (1 + markup). $1,000 at 25% markup is $1,000 × 1.25 = $1,250.
- Profit = price − cost. $1,250 − $1,000 = $250.
- Margin = profit ÷ price. $250 ÷ $1,250 = 20%.
- Markup from a margin = margin ÷ (1 − margin). 0.25 ÷ 0.75 = 33.3%.
| Markup on cost | Margin of price |
|---|---|
| 10% | 9.1% |
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 30% | 23.1% |
| 35% | 25.9% |
| 40% | 28.6% |
| 50% | 33.3% |
| 75% | 42.9% |
| 100% | 50.0% |
Read it either way: a 50% markup leaves a third of the price as profit, and keeping half the price means doubling your cost.
What to count as the cost before you mark it up
The markup only works if the cost underneath it is the whole cost. The number to type in is everything the job takes out of your pocket, not just the parts:
- Materials and parts, at what you paid for them, including delivery.
- Your own hours on site, at a rate that pays you — not just a helper’s wages.
- Travel, parking, fuel, and the time spent getting there.
- Disposal, dumpster rental, permits and consumables — the blades, tape and fasteners that never get their own line.
- A share of the overhead: van, insurance, tools, phone and the hours spent quoting jobs that went nowhere.
Leave any of those out and the markup is covering them instead of making a profit. The commonest one to miss is the owner’s own labor, which turns a job that “made $400” into a job that paid $400 for two days.
Materials and labor do not have to carry the same markup
Plenty of trades price the two differently: materials marked up by one percentage, and labor charged at an hourly or day rate that already has the profit built into it. If that is how you work, run the calculator on the materials alone and add your labor rate on top, rather than marking up a total that already contains your margin twice.
Sales tax sits outside all of this. The price here is before tax; whether tax applies to parts, labor or both depends on your state and the kind of job, and the invoice handles it as a separate line. The guide to sales tax on labor says what to check.
Put the price on the paper
Once you have the figure, the estimate templates and quote templates open with your trade’s usual jobs already listed, so the price goes straight onto a PDF you can send from your phone. For a fixed price, use a quote; for a best guess that may move, an estimate — the difference between the two matters once the job turns out bigger than expected. When the work is done and the invoice goes out, the invoice due date calculator turns Net 15, 30 or 60 into the date to write on it.
Questions about markup
Is markup the same as profit margin?
No, and mixing them up is the most common pricing mistake in a small trade business. Markup is the profit as a percentage of what the job cost you. Margin is the same profit as a percentage of the price the customer pays. A 25% markup on a $1,000 job gives a $1,250 price and $250 profit, which is a 20% margin — not 25%. To keep 25% of the price you need a 33.3% markup.
What markup should a contractor or tradesperson use?
There is no single right number, and anyone who gives you one without seeing your books is guessing. Start from the other end: add up what it costs to run the business for a year — van, insurance, tools, phone, the hours you spend quoting and chasing — and the profit you want on top, then spread that across the jobs you can actually do. The markup that covers it is yours. The calculator lets you try a figure and see what it leaves.
Do I show the markup on the estimate or invoice?
Usually not. A customer is quoted a price for the work, and the price is what goes on the paper. The exception is cost-plus work, where the contract itself says the customer pays the cost plus an agreed percentage; there the percentage is part of the deal and belongs on the paperwork. If you are not sure which kind of job it is, the contract decides.
How do I turn the margin I want into a markup?
Divide the margin by one minus the margin. A 20% margin is 0.2 ÷ 0.8 = 25% markup; a 30% margin is 0.3 ÷ 0.7 = 42.9% markup; a 50% margin needs a 100% markup, which is doubling your cost. The "I want a margin" tab in the calculator does this sum for you.