For contractors Markup vs margin Convert Business owners

Markup vs Margin Calculator for Contractors

Convert a target profit margin into the markup (and sell price) that actually delivers it — or see what margin a chosen markup really produces. Built for owners who price work — not for homeowners shopping a project budget.

Convert margin ↔ markup

Cost $ Job or line-item cost before margin/markup.

Target margin (% of price) Percent points (20 = 20%). Values like 0.35 auto-correct to 35% with a warning. Margin-on-price.

Example targets (not recommendations):

Optional: contingency & overhead before margin

Contingency (%) Percent points. Applied to direct cost first (v1 order).

Overhead

Overhead (%) Percent points. % of cost after contingency.

Sell price

—

Profit: —

Equivalent markup

—

Cost basis: —

Direct cost

—

Contingency

—

Overhead

—

Margin

—

Markup

—

Use this margin on a full job price (labor + materials + OH).

Open job pricing with this cost & margin →

Reference pairs

Common margin ↔ markup equivalents. Examples only — not recommended targets. Matching row highlights when your result lands on a pair.

Margin (of price)	Equivalent markup (of cost)

Self-serve math for business owners. Not consulting, coaching, or pricing advice. This page does not tell you what margin to target. For a full job stack see job pricing; for billable rate see hourly rate. Not a homeowner project-cost tool.

Methodology

Margin is profit as a percent of price. Markup is profit as a percent of cost. They are not interchangeable:

Mode A — target margin m on price price = C / (1 − m) markup = m / (1 − m) Mode B — markup u on cost price = C × (1 + u) margin = u / (1 + u) Example: 20% margin ↔ 25% markup

Worked example

Direct cost $1,000, target margin 20% (no OH/contingency):

Sell price = 1000 / (1 − 0.20) = $1,250
Profit = $250
Equivalent markup = 0.20 / 0.80 = 25%

Same numbers in Mode B: $1,000 cost × 25% markup → $1,250 price → realized margin 20%.

Assumptions

v1 optional stack order: contingency % on direct cost → then overhead % or $ on that subtotal → then margin or markup.
Percent fields use percent points (enter 20 for 20%, not 0.20). Values in (0, 1) such as 0.35 are treated as accidental fractions and auto-corrected to 35% with a visible warning — same as other BUILDER calculators.
Money rounded to 2 decimals; pennies may differ slightly from hand calc.
Chip targets and reference pairs are examples, not recommended margins.

Common mistakes

Adding 20% to cost and calling it a “20% margin” (that is 20% markup ≈ 16.7% margin).
Using the margin formula with a markup number (or the reverse).
Stacking materials markup and then treating the same % as job margin without documenting the order.

FAQ

Is markup the same as margin?

No. Markup is on cost; margin is on price. A 25% markup yields a 20% margin.

What markup gives a 20% margin?

25% markup on cost. Use Mode A with 20% margin to see price and markup together.

Can I price a full job here?

This page converts margin ↔ markup on a cost basis. For labor + materials + OH + contingency on a job, use the job pricing calculator.

Does this recommend a target margin?

No. It only converts the numbers you enter. Targets are business decisions outside this tool.