Pricing fundamentals

Markup and Margin
Calculator

Calculate markup and margin for a contractor quote or completed job. Enter cost with a markup, target margin, or selling price to convert between markup and margin and see the required price and gross profit.

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Enter your numbersBuild the calculation
What the job, service, or product costs you before profit.
What do you know? Choose the number you want to start with.
The percentage of the selling price you want to remain as gross profit.
Price from the margin you need

How to Price a Job for a Target Profit Margin

Contractors often know the estimated job cost and the gross margin they want, but still need to determine the selling price. Because margin is measured against selling price—not cost—the desired margin cannot simply be added to cost.

Required selling priceSelling Price = Job Cost ÷ (1 − Target Margin)

Enter the margin as a decimal in the formula. For example, 35% becomes 0.35. The calculator performs that conversion automatically.

Target Margin Pricing Example

For an $8,000 job cost and a 35% target profit margin:

Job cost$8,000.00
Target margin35%
Required price$12,307.69

The price produces $4,307.69 in gross profit and requires a 53.85% markup on cost. By contrast, adding a 35% markup gives a price of only $10,800:

Why 35% markup is not 35% margin$8,000 × 1.35 = $10,800
$2,800 ÷ $10,800 = 25.93% margin

35% markup ≠ 35% margin. A 35% margin requires a 53.85% markup.

Why Markup and Margin Are Different

Markup measures gross profit relative to cost. Margin measures gross profit relative to selling price.

MarkupMarkup = Gross Profit ÷ Job Cost
Profit marginProfit Margin = Gross Profit ÷ Selling Price

Learn the difference between markup and margin

Your Price Depends on Accurate Job Cost

Your target-margin calculation is only as accurate as your job-cost estimate. Underestimated labor, materials, subcontractors, equipment, or other direct expenses can push the actual margin below the target. Start by understanding your true job cost. Base wage alone can also understate employee expense, so use the Labor Burden Calculator to calculate your true employee labor cost.

A target gross margin does not automatically guarantee adequate company-level profitability. Jobs must collectively support the business, including costs outside the direct job estimate. Use the Overhead Recovery Calculator to calculate how much overhead your jobs need to recover.

Set the Price, Then Measure the Result

Estimate Job Cost Choose Target Margin Calculate Selling Price Complete the Job Enter Actual Costs Measure Actual Profit

Before the job, estimated cost and target margin establish the price. After the work is complete, use actual costs to calculate your actual job profit and margin.