MyWorkCalc

Contractor Markup Calculator

Enter materials, labor, and other costs with your markup % to get sell price, gross profit, and margin — with a clear markup vs margin explanation.

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Related tools:

Markup vs Margin CalculatorJob Profit CalculatorLabor Burden CalculatorGuide: How to Calculate Job Profit
Key concept: 25% markup is NOT the same as 25% margin. A 25% markup on $10,000 of cost gives you $12,500 in revenue — but your gross margin is only 20%.

Cost vs Markup vs Margin

  • Cost: Everything you spend to complete the job — materials, labor, subcontractors, equipment, overhead.
  • Markup: The percentage added to your cost to arrive at the selling price.
  • Selling Price: What the customer pays. Selling Price = Cost × (1 + Markup%).
  • Gross Profit: Selling Price − Cost.
  • Gross Margin: Gross Profit as a percentage of Selling Price — not of cost.

Formulas

Selling Price = Cost × (1 + Markup%)

Gross Profit = Selling Price − Cost

Gross Margin = Gross Profit ÷ Selling Price × 100

Worked Example

Job with a 30% markup:

  • Materials: $4,000
  • Labor: $3,500
  • Overhead: $500
  • Total cost: $8,000
  • Selling price: $8,000 × 1.30 = $10,400
  • Gross profit: $2,400
  • Gross margin: $2,400 ÷ $10,400 = 23.1%

Why 25% Markup ≠ 25% Margin

This is one of the most common pricing mistakes contractors make:

Cost: $10,000 + 25% markup → Selling price: $12,500

Gross profit: $2,500  |  Margin: $2,500 ÷ $12,500 = 20%

To achieve 25% margin, you need a 33.3% markup:

$10,000 × 1.333 = $13,333  |  Profit: $3,333  |  Margin: 25%

Use the Markup vs Margin Calculator to convert between the two in either direction.

Frequently Asked Questions

What markup do contractors typically use?

Markup varies widely by trade, market, and overhead structure. Residential contractors commonly use 20–50%. Specialty trades with high overhead or liability may go higher. Always verify your actual costs before setting markup — industry averages don't account for your specific cost structure.

How do I price a job to hit a target margin?

Rearrange the formula: Markup = Margin ÷ (1 − Margin). For a 30% margin target: Markup = 0.30 ÷ 0.70 = 42.9%. Enter that in the calculator to see the resulting price.

Should I use markup or margin to price jobs?

Markup is easier to apply to cost estimates. Margin is easier for comparing profitability across different jobs. Many contractors think in markup but should track profitability in margin — the two numbers are related but different.