How to use this margin & markup calculator
Enter your cost for a job or unit and the price you charge, and the tool shows your profit, your margin (profit as a share of price), and your markup (profit as a share of cost). Want to work backward? Enter a target margin and it returns the price you need to hit it.
Margin vs. markup — the difference that costs you money
- Markup = (price − cost) ÷ cost. How much you add on top of what it cost you.
- Margin = (price − cost) ÷ price. The share of the price you actually keep.
- They are not equal. A 50% markup is a 33% margin; a 100% markup is a 50% margin.
- To hit a target margin: price = cost ÷ (1 − margin). A 40% margin on a $60 cost means a $100 price.
A worked example
A job costs you $60 and you charge $100. That is $40 of profit — a 66.7% markup but only a 40% margin. If you thought "40% markup" was your target and priced at $84, you would actually be running a 28.6% margin. Quoting on margin keeps a healthy-looking markup from hiding a thin profit.
Price every job to keep what you need
Pick the margin your business needs to cover overhead and profit, then price backward from it on every bid. Pair this with the markup vs. margin guide, check the whole picture with the break-even calculator, and build the quote itself with the free estimate templates.