Margin is the share of the price you keep. It is not the same as a markup on cost, and the two are the most common mix-up in pricing. Both numbers are shown below so you can see which one you are looking at. Capped at 90 percent, because above that the price runs away.
Put this on the estimate
$14,972
11 lines, at a 25.0% margin.
Lines add up to
$11,229
Your cost, before margin
Profit
$3,743
How an Estimate Is Built
A line is three things: what it is, how many, and what each one costs. Quantity times rate is the amount. The amounts add up to the cost of the job. That is the whole structure, and it is the same structure whether the estimate is for a patio, a driveway, a kitchen, or a commercial tenant improvement.
The reason this belongs in one screen rather than five is that most estimating software spends its first four screens on setup: a customer record, a job record, a price book, a template. None of that is the part a contractor came for on a Tuesday night. He came to find out what number to send.
Margin Is Not Markup
The one input between cost and price is the margin. Margin is the share of the price you keep. It is not the same as a markup on cost, and mixing the two up is the single most common pricing error we find in the trade threads. Add 25 percent to a cost and you have a 20 percent margin, not 25.
So this tool shows both numbers at once. Type the margin you want to keep and it tells you the markup that margin represents. The price is the cost divided by one minus the margin, and it is never the cost multiplied by anything.
The same conversion, with the full working, is in our construction profit margin post. The free contractor markup calculator does it the other direction if you already know your markup and want the margin.
The estimate is the start of the job
You have the number. What happens next is that the hours, the material and the extras either land on that job or they do not, and that is what decides whether the estimate was right. SiteOps tracks them against it while the work is running.
What Belongs on the Lines
An estimate is a promise about a job that has not happened yet, so the lines that go on it matter as much as the arithmetic. Three habits separate an estimate that holds from one that turns into an argument.
Write down what is not included. Every expensive surprise we read about in the trade forums started as a scope nobody wrote down: the driveway that stops at the property line, the fine grading that has to be done by hand, the four sections and redwood joints that were never in the quote. An exclusion line costs nothing and prevents the whole conversation.
Price the allowances as allowances. If a remodel carries a fixture package nobody has picked yet, put a number on the line and name it as an allowance, so a $4,000 allowance and a $9,000 selection is a change order rather than a loss.
Put the change order process in writing before the work starts. Free change order template, because the clause is worth nothing without a form to sign.
What This Does Not Do
This tool does not build the estimate for you, and neither does SiteOps. Nobody can price your job from a web page, because nobody else knows what your crew costs you, what your sub quoted, or what your market pays this month.
You write the lines. The tool multiplies and adds them. SiteOps holds the finished estimate, sends it for signature, and then tracks the hours and the receipts against it so you find out whether the number was right while the job is still open rather than at the end of the year.
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Frequently asked questions
- Is this estimate builder really free?
- Yes. No signup, no email, no card. Type your lines and print or save the estimate. Every calculator on this site works the same way.
- How do I work out what to charge on an estimate?
- Build the cost first, line by line, then divide by one minus the margin you want to keep. If your cost is $11,229 and you want a 25 percent margin, the price is $11,229 divided by 0.75, which is $14,972. Never multiply the cost by the margin.
- What is the difference between margin and markup?
- Markup is measured against cost. Margin is measured against the price. A 25 percent margin is a 33.3 percent markup on the same job. Pricing with a markup when you meant a margin always leaves you with less than you intended.
- Can I save the estimate or send it?
- Print it or save it as a PDF from the browser and it is yours, with no account needed. Sending it for a signature is what the paid product does, and this page does not pretend otherwise.
- Does SiteOps write the estimate for me?
- No, and it is worth being direct about that. SiteOps does not do takeoffs, production rates, or estimating math. You write the estimate. What SiteOps does is hold it, send it for signature, and then track the real hours and costs against it while the job runs.
- How many lines should an estimate have?
- As many as the job has distinct costs, and no fewer. Lumping a pump, a haul-off and a permit into one catch-all line hides which one is eating your margin. Split anything you would want to point at later, and put an exclusion line under the ones you are not covering.
This tool and page are general information for the construction trades, not accounting, tax, or legal advice. The tool does no estimating of its own: it multiplies each quantity by its rate and adds the amounts, and every line is yours. The demo figures are a worked example, not a market rate for your area. Nothing here is a recommendation of what to charge on any specific job. Confirm your burden, overhead and supplier pricing with your own books before you send a number.
Know what the job made before it is over
You just built one estimate by hand. SiteOps holds every estimate, sends it for signature, and puts the real hours and receipts against it as the job runs, so the margin you priced is a number you watch instead of a number you hope for. Priced by crew size, not per seat — $79/mo for a 10-man crew.