Markup and margin calculator
Turn the cost of a part, material or subcontract into a price, two ways: with a markup on cost, or with a margin on price. They are not the same number, and mixing them up is one of the most common ways service businesses underprice.
1. Your numbers
The figures already filled in are examples only, so you can see how it works. They are not market rates. Replace them with your own.
2. The working
Markup is a percentage of your cost. Margin is a percentage of the price. The same dollar profit is always a bigger markup than margin.
| Step | Using markup | Using margin |
|---|---|---|
| Pricemarkup: cost × (1 + markup) · margin: cost ÷ (1 − margin) | $120.00 | $114.29 |
| Gross profitprice − cost | $40.00 | $34.29 |
| Markup on costprofit ÷ cost | 50% | 42.86% |
| Margin on priceprofit ÷ price | 33.33% | 30% |
With markup $120.00, with margin $114.29.
These numbers come from your inputs. You decide the final price. Pick one method and use it everywhere, so your quotes, your books and your crew all mean the same thing by "20%".
3. Markup and margin side by side
| Markup on cost | Same as margin on price |
|---|---|
| 10% | 9.09% |
| 20% | 16.67% |
| 25% | 20% |
| 33.33% | 25% |
| 50% | 33.33% |
| 75% | 42.86% |
| 100% | 50% |
If you want to keep 20% of every invoice, you need a 25% markup, not 20%. A 20% markup only keeps 16.67%.
4. Before you use it
- Include everything in cost: delivery, sales tax you can't pass on, and the trip to the supply house.
- Labor is separate. Price your time with your hourly rate; use markup or margin on parts and materials.
- Show it the same way every time on quotes, so customers see consistent prices.
From jobtill.com/tools. Use your own costs; this calculator doesn't suggest prices. Nothing you type is sent or saved: the math runs in your browser.
How JobTill helps
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