Free contractor tools
Markup vs Margin Calculator
The two get mixed up constantly — and the mistake quietly eats your profit. Enter a cost and convert between them instantly.
What do you know?
Price to charge
$13,500
What's the difference between markup and margin?
Markup is profit as a percentage of your cost; margin is profit as a percentage of your price. They describe the same dollar of profit from two different angles, which is exactly why they get confused — and the confusion always works against you, because a markup is always a bigger number than the equivalent margin.
How do you calculate markup and margin?
price = cost × (1 + markup%)
markup% = profit ÷ cost
margin% = profit ÷ price
Example: a job costs $10,000. A 35% markup gives a price of $13,500 and $3,500 of profit — but that's only a 26% margin. If you actually wanted a 35% margin, you'd need to charge about $15,385. Charging "35%" without knowing which one you mean can leave thousands on the table per job.
Which should contractors use to price work?
Price from the margin you need to keep the business healthy, then express it as the markup you apply to costs day-to-day. Decide the margin first (it has to cover overhead and profit), convert it to a markup, and apply that markup consistently to every estimate.
How Simple Contractor CRM handles margin
In SCC's estimate builder, you enter material and labor costs and a customer price, and margin % updates live as you build the line items — so you see exactly what each line and the whole job is making before you ever send the estimate.
Frequently asked
- Is a 50% markup the same as a 50% margin?
- No. A 50% markup on a $100 cost gives a $150 price and $50 profit — that's a 33% margin. A 50% margin on that same $100 cost would require a $200 price (a 100% markup). Markup is always the larger percentage.
- What's a good markup for contractors?
- It varies by trade, overhead, and risk, but many residential contractors target a 35–50% markup (roughly a 26–33% margin) to cover overhead and leave real profit. Run your own numbers — undercharging is the most common reason contractors stay cash-poor.
- How do I convert margin to markup?
- markup% = margin% ÷ (1 − margin%). A 30% margin equals a ~43% markup; a 40% margin equals a ~67% markup. This calculator does the conversion for you.
- Does this include overhead?
- Markup should cover both overhead and profit. If you only mark up to cover direct job costs, your 'profit' is really just paying the office. Use the Profit Margin Calculator to break revenue down into materials, labor, overhead, and true net profit.
Run the next job the simple way.
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