Profit margin and markup calculator

Enter your cost and price to see your real margin and markup, or enter your cost and the margin you want to see what to charge. Margin and markup aren’t the same number, and mixing them up is one of the easiest ways to underprice a job.

Find your margin and markup

Your cost ($) Price to customer ($)

Profit–

Margin–

Markup–

Price a job for the margin you want

Your cost ($) Target margin (%)

Price to charge–

Profit–

Markup needed–

The formulas this calculator uses

Margin = (Price − Cost) ÷ Price

Markup = (Price − Cost) ÷ Cost

Price for a target margin = Cost ÷ (1 − Margin)

Margin is profit as a share of the price. Markup is profit as a share of your cost. On the same job, markup is always the higher number. A 25% markup is only a 20% margin.

What should “cost” include?

Use the job’s direct costs: labor (with payroll taxes and workers’ comp), materials, equipment, subcontractors, and job-specific expenses like permits, disposal, and travel. Leave out overhead. Your margin is what has to cover overhead and leave a profit. Our job costing guide walks through what belongs where.

Common questions

Is a 20% markup the same as a 20% margin?

No. A 20% markup gives you a 16.7% margin. To get a 20% margin you need a 25% markup. See the full markup-to-margin chart.

How do I convert a margin to a markup?

Markup = Margin ÷ (1 − Margin). For a 30% margin: 0.30 ÷ 0.70 = 42.9% markup.

What margin should I charge?

Enough to cover your overhead plus the profit you want. If your overhead runs 12% of revenue and you want 8% profit, your jobs need to average at least a 20% gross margin.

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