Contractor Markup Calculator

Markup is profit measured against cost. Margin is profit measured against price. Same dollars, two different yardsticks — and they never match. Mark up a $10,000 job 20% and you bill $12,000. The $2,000 you made is 20% of your cost but only 16.67% of the price. Your markup is 20%. Your margin is 16.67%.

Ask around any jobsite — do you know the difference between markup and margin? — and you'll get more wrong answers than right ones, from guys who are excellent at the work. No shame in it. It's the classic case of being a veteran carpenter and a rookie business man. But here's what it costs: if you set your markup at the margin you WANT, every job you win pays less than you planned. Aim for 20% and mark up 20%, and you're keeping 16.67% before anything goes wrong. If your gut keeps telling you 'I think that is too low' — this is usually why. Price with markup. Measure with margin. Never let the two swap seats in a bid.

For the other direction — a price and a cost, working out the margin you actually kept — run it through the construction profit margin calculator.

No mystery. Markup mode: Price = Job Cost × (1 + Markup%). Profit = Price − Job Cost. Margin = Profit ÷ Price. Margin mode runs backward from the number you want to keep: Price = Job Cost ÷ (1 − Margin%). Profit = Price − Job Cost. Markup = Margin ÷ (1 − Margin).

Worked example, using the defaults: a $12,500 job at 25% markup prices at $15,625, makes $3,125, and keeps a 20% margin. Now flip it — want a 30% margin on that same job? Price = $12,500 ÷ 0.70 = $17,857.14, which takes a 42.86% markup. See the pattern: the markup you need is always a bigger number than the margin you want, and the higher the margin, the faster that gap grows.

Margin = Markup ÷ (1 + Markup). Pin this to the shop wall.

The margin is always the smaller number, and the gap widens as you climb — a 100% markup only ever keeps half the price. The row worth memorizing: you would need to markup 11.11% to get a 10% profit margin. If you've been typing 10 into your estimating sheet and calling it a 10% profit, you've been short about 1 point on every job — and on thin work, that point can be the whole profit.

"What is the typical markup everyone is charging" is one of the most-asked questions in the trades — and the honest answer is that nobody else's number fits your shop. The right markup covers YOUR overhead (trucks, insurance, the shop, the estimating hours nobody bills) plus the profit you're in business to make, and your overhead is not your competitor's. That's also why bidding off other people's prices is a trap. And when one outfit is way under everybody, remember: the low prices can't be making any money. That's not the market rate — that's a business failing in slow motion.

If you're too new to know what your market will bear, build the price from your costs up, not from the competition down. Plenty of contractors who thought maybe they were over charging finally ran their real overhead and found the opposite. One more, for the cost-plus guys: handing the client every receipt with a skinny percentage on top is how you end up with too much information and not enough markup.

The number you just ran is the plan on day one. Then the job starts. A guy stays two hours late. The client asks for an extra nobody writes down. Materials take three more supply-house runs than the takeoff said. Your real margin moves every day the crew is out there, and a calculator can't follow it — it prices the job, it doesn't cost it.

Costing the job means knowing, while it's still running, whether the margin you planned on this page is the margin you're actually getting — that's how SiteOps tracks job costs while the job is running, starting with GPS-verified time tracking that puts real hours on the right job, not a guess filled in on Friday. That's the whole reason SiteOps exists.