Contractor markup calculator

Enter what a job costs you and the profit margin you want, and this works out the price to charge — and, just as importantly, the markup that price represents. Markup and margin are two different numbers, and confusing them is one of the most expensive arithmetic mistakes a contractor can make.

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Markup and margin are not the same number

This is the whole point of the tool, so it is worth being blunt. Markup is measured against your cost. Margin is measured against your price. They describe the same dollar of profit from two different ends, and the gap between them is bigger than almost everyone expects.

Add 30% markup to a $1,000 job and you charge $1,300 — but your margin is only 23%, because $300 is 23% of $1,300, not 30%. The contractor who thinks "I add 30%, so I make 30%" is quietly making a third less than they believe on every job. Do that all year and it is the difference between a business and a hobby with a van.

Markup-to-margin, at a glance

A reference you can sanity-check against. If you have always priced by markup, find your number in the left column and see what you are actually keeping.

The formula, if you ever need it on paper: to hit a target margin, divide your cost by (1 − margin). A $1,000 cost at a 30% margin is 1000 ÷ 0.70 = about $1,429 — which is a 43% markup, not 30%.

How to choose your margin

Your margin has to cover more than it looks like it does. It absorbs the jobs that go sideways, the customer who pays sixty days late, the material price that moved between the quote and the order, and the warranty callback eighteen months from now. A margin that only just breaks even on a clean job loses money the moment a job is not clean — and few are.

Most trade work sustains a margin somewhere in the 20–40% band on labour-and-materials jobs, higher on small or specialist work where your expertise is the product, lower on big material-heavy jobs where you are partly a purchasing agent. Start where your trade sits and adjust for how much risk the specific job carries.

Cost is not just materials

The tool is only as honest as the cost you feed it. "What the job costs you" means all of it: materials, the hours you will spend times what an hour of your time actually costs, anything you sub out, plus the job-specific extras — permits, disposal, a rental, the second trip for the part the supplier got wrong. Leave those out and every margin you calculate is optimistic, which is a polite word for wrong. If you are not sure what an hour of your time costs, the hourly rate calculator works it out, and the job estimate calculator adds the pieces up for a whole job.

A worked example

A job costs you $1,000 all-in and you want a 30% margin. The tool prices it at about $1,429: a 42.9% markup, $429 of profit, and a margin of exactly 30%. If you had instead "added 30%" the way most people do, you would have charged $1,300, kept $300, and run a 23% margin — $129 less profit on one small job, and you would never have seen it, because the mistake hides inside a number that looks right.

Don't price by matching the other guy

The most common way contractors set a markup is by copying whatever they think the competition charges. The problem is that you are copying a number without the costs behind it — their materials deal, their overhead, their billable hours, none of which are yours. A markup that keeps them solvent can bankrupt you, and one that leaves them scraping by can leave real money sitting on your table. Price from your own cost and your own margin, and use what others charge only as a reality check on whether your market will bear the result — not as the source of the number. If the price your margin needs is well above the local going rate, that is information: it usually means your overhead is high, your billable hours are low, or the market genuinely will not support a living wage for that work. All three are worth knowing before you take the job, not after.

Questions people ask about this

So should I quote markup or margin to a customer?

Neither. Quote a price for the job. Markup and margin are how you arrive at that price and check it is worth doing; they are not something a customer needs to see or argue with.

Why does a 50% markup only give a 33% margin?

Because the markup is measured against cost and the margin against the (larger) price. Half of cost is a third of cost-plus-half-of-cost. It is not a trick — it is just which number sits on the bottom of the fraction.

Is anything I type here stored?

No. It runs entirely in your browser. Nothing is sent to us, and there is no signup.

Related free tools: hourly rate calculator, job estimate calculator, free invoice template.