Markup and margin calculator

Markup vs margin

Markup and margin describe the same difference from opposite sides of a job. Markup compares profit with your cost. Margin compares profit with the amount you charge. Because the denominators differ, entering the same percentage produces different selling prices. Choose which percentage you mean before applying it to parts and labor. The calculator shows both percentages so the quote can be reviewed without relying on the label alone.

With the starting example, parts and loaded labor combine into a cost basis. Markup multiplies that cost by one plus the chosen percentage. Margin divides the cost by one minus the chosen percentage. Both methods can be useful, but they answer different questions. A supplier’s markup schedule cannot be treated as your company’s gross-margin report just because both are expressed with a percent sign.

The conversion table runs from ten through one hundred percent markup. One hundred percent markup doubles cost and corresponds to fifty percent margin. A one hundred percent margin with positive cost has no finite selling price, so margin mode requires a value below that point. To work backward from labor requirements, use the labor cost calculator. For repair tasks, the handyman price list adds time and materials before you assess the percentage. Keep the underlying cost assumptions visible to whoever reviews the quote.

Contractor markup calculator

Enter the cost you expect to bear for parts, the labor hours, and the loaded labor cost per hour. Loaded cost should already include the labor expenses you intend to allocate to this job. Do not enter your customer-facing hourly selling rate as labor cost and then add a full profit percentage again unless that double adjustment is deliberate. The tool cannot know whether an input already contains profit.

For a parts purchase, decide whether freight, consumables, disposal, or a planned return trip belong in the same cost basis. If they are real job costs and absent from every input, the displayed profit overstates what remains. This model intentionally keeps the arithmetic small enough to inspect. You can combine known costs before entering them, but keep a separate record of the components so a later price change is explainable.

A cleaning business can compare a fixed quote from the house cleaning price calculator with its expected labor and supplies. A lawn crew can do the same with the lawn mowing price calculator. Different trades still use the same denominator rules. The target percentage is a business choice, not a recommended industry standard. Test several targets against your cost record and the scope you can actually deliver before publishing a reusable price.

Markup vs margin conversion table

A conversion table is useful when an estimate, supplier sheet, and accounting report use different terms. Read each row as a pair: the first percentage is applied to cost, and the second is the resulting share of selling price. The relationship does not depend on whether the job costs a little or a lot. The dollar amount changes, but the percentage conversion is the same for every positive cost basis.

When you discount a finished quote, calculate the effect on margin again. A discount reduces revenue while the parts and planned labor may remain unchanged. Subtracting a few percentage points from your intended margin is not generally the same as discounting the selling price by that percentage. If you use discounts often, write down the resulting dollar profit alongside the quoted total before accepting the work.

This calculator reports job-level profit on the costs entered, not a complete business income statement. Expenses left outside the cost basis still need paying. Review the pressure washing price calculator for another example where a minimum job changes the final selling amount. The Driveway Desk workflow connects a checked quote to the job record, while plan pricing remains separate from customer job prices. Save the scope, cost basis, percentage method, and final amount together so the next person reading the quote can reproduce the decision.

How we calculate this

Cost = parts + labor hours × loaded labor cost. With markup: price = cost × (1 + markup / 100). With margin: price = cost / (1 − margin / 100). Margin = markup / (100 + markup) × 100; markup = margin / (100 − margin) × 100. A 100% margin cannot be reached with a positive cost.

This conversion is arithmetic, not a market-rate recommendation. Parts, labor, and the target percentage are a starting point, set your own. Profit shown here is before any costs you have not included in the cost basis.