Markup vs Margin Calculator
Convert between markup and margin in either direction. Enter your job cost and either figure to see the full pricing picture.
Markup vs Margin — The Key Difference
Both markup and margin describe profit, but they use different denominators. Markup is profit as a percentage of cost. Margin is profit as a percentage of revenue. Because the denominators differ, the same dollar profit produces two different percentages — and confusing them is one of the most common pricing mistakes contractors make.
Formulas
Markup → Margin:
Selling Price = Cost × (1 + Markup)
Margin = Markup ÷ (1 + Markup)
Margin → Markup:
Markup = Margin ÷ (1 − Margin)
Selling Price = Cost ÷ (1 − Margin)
Worked Example
Job cost: $10,000, markup: 25%
- Selling price: $10,000 × 1.25 = $12,500
- Gross profit: $2,500
- Gross margin: $2,500 ÷ $12,500 = 20%
25% markup = 20% margin. To hit 25% margin, you need 33.3% markup.
Common Conversions
| Markup | Margin |
|---|---|
| 10% | 9.1% |
| 20% | 16.7% |
| 25% | 20.0% |
| 33.3% | 25.0% |
| 40% | 28.6% |
| 50% | 33.3% |
| 100% | 50.0% |
Frequently Asked Questions
Which should I use — markup or margin?
Use markup to build your price from cost (it's easier to apply). Use margin to compare profitability across jobs (it's a better performance metric). Track both.
What margin should contractors aim for?
Varies widely by trade, market, and overhead. Many contractors target 15–30% gross margin. Specialty or low-volume trades may need higher margins to stay profitable after overhead and taxes.
If my client asks for my margin, can I give them my markup instead?
No — they mean different things. Giving markup when margin is asked (or vice versa) will produce confusion or disputes. Be clear which figure you're using.