Free Markup vs Margin Calculator

Markup Calculator

Job Cost

Total cost of the job (labor + materials + overhead)

Markup Percentage

Percentage added on top of your costs

Margin to Markup Converter

If you want this profit margin...

You need to markup by:

0.0%

Key Difference: Markup is based on cost. Margin is based on selling price. A 50% markup only gives you a 33.3% margin.

Markup vs Margin: The #1 Pricing Mistake Contractors Make

The Mistake That Costs Thousands

A contractor marks up a $10,000 job by 20% and charges $12,000. They think they're making a 20% profit margin. But the actual margin is only 16.7%. Over a year of jobs, that confusion can cost tens of thousands of dollars in lost profit. Our job cost calculator helps you estimate total costs accurately before you even apply a markup.

Markup vs Margin Explained Simply

Markup = profit divided by cost. It's what you add on top of costs.
Margin = profit divided by selling price. It's what you keep from each dollar earned.
Markup is always a higher number than margin for the same profit amount.
A 100% markup is only a 50% margin. A 50% markup is only a 33% margin.

Which One Should Contractors Use?

Use markup for pricing - it's easier to apply to costs. Use margin to evaluate profitability - it tells you what percentage of revenue you're actually keeping. Just don't confuse the two when talking to your accountant or reviewing your P&L.

How ThePocketBoss Tracks Both

ThePocketBoss calculates both markup and margin on every estimate and invoice automatically. Our contractor estimating software builds in accurate pricing from the start, and the contractor invoicing software shows your real numbers on every bill you send.

Frequently Asked Questions

Is a 50% markup the same as a 50% margin?

No. A 50% markup results in a 33.3% margin. Markup is calculated on cost, margin is calculated on the selling price. They are always different numbers.

What markup should contractors use?

It varies by trade, but most contractors use 25-100% markup depending on the job type. Specialty work commands higher markup. Use this calculator to see what margin that actually gives you.

How do I convert margin to markup?

Divide the margin percentage by (100 minus the margin percentage), then multiply by 100. For example: 25% margin = 25 / 75 * 100 = 33.3% markup. Or just use the converter above.

Why does this matter for my business?

Confusing markup with margin means you're making less profit than you think. If you aim for a 30% margin but apply a 30% markup, you're actually getting a 23% margin - leaving 7% on the table on every single job.

Markup vs Margin Calculator