What is the difference between markup and margin?

Markup is the percentage you add on top of your cost; margin is profit as a percentage of the final price. A 30% markup on a $1,000 job gives a $1,300 price, but the $300 profit is only 23.1% of that price. Pricing to a target margin while thinking in markup is one of the most common ways contractors underprice their work.

How do I convert markup to margin?

Divide the markup by one plus the markup: margin = markup / (1 + markup). For example, a 50% markup equals a 33.3% margin. To go the other way, markup = margin / (1 - margin), so a 33.3% margin requires a 50% markup.

What markup should a contractor charge?

Typical ranges are 25-50% on materials, 15-25% on subcontractors, and 20-40% overall for overhead and profit. These are industry norms, not rules. The right markup depends on your overhead, your market, and the margin your business needs to stay profitable.

What should I include in job costs before applying markup?

Include every direct cost: materials, labor hours at your fully-loaded hourly cost, and an overhead allocation for the costs of running your business, such as insurance, vehicles, tools, and admin time. This calculator applies overhead as a percentage of direct costs, with 15% as a common starting point. Marking up an incomplete cost means your "profit" quietly pays for forgotten expenses.

Markup & Margin Calculator for Job Pricing

Price service jobs from materials, labor, and overhead, convert markup to true profit margin, and compare typical contractor markup ranges.

Back to Calculators

What does the job cost you?

Enter your direct costs. Overhead covers the costs of running your business (insurance, vehicles, admin, tools) spread across your jobs.

Materials Cost ($)

Labor Hours

Hourly Cost ($/hr)

Overhead (% of direct costs)

Most service businesses run 10-25% overhead. 15% is a common starting point.

Markup (%)

Your Job Price

$0.00

Labor (0 hrs)$0.00

Materials$0.00

Overhead (15%)$0.00

Total job cost (break-even price)$0.00

Gross Margin

23.08%

Gross profit: $0.00

Markup and margin are not the same: a 30% markup on cost is only a 23.1% margin on the price.

Markup ↔ Margin Converter

Type either value and the other updates. Margin = markup ÷ (1 + markup); markup = margin ÷ (1 − margin).

Markup (%)

Margin (%)

Typical Contractor Markup Ranges

Materials	25 - 50%	Covers procurement, handling, waste, and warranty risk
Subcontractors	15 - 25%	Covers coordination, scheduling, and liability
General overhead & profit	20 - 40%	Overall job markup for overhead recovery plus profit

Typical industry ranges, not rules. Your market, trade, and overhead determine the right markup for your business.

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