Profit Margin & Markup Calculator
Enter your job price and your job cost and get profit, margin, and markup in one shot. These two percentages get confused constantly — and mixing them up is one of the fastest ways to under-price a job without realizing it.
Profit Margin & Markup Calculator
Enter what you charged the customer and what the job cost you. Margin and markup both come from the same profit dollar — they are just measured against different bases.
Margin = profit ÷ price. Markup = profit ÷ cost. The same job always has a lower margin % than markup % whenever there is a profit — they are not interchangeable.
Margin vs. markup: the formulas
Both start with the same number — profit = price − cost — but they divide it by different bases. Margin measures profit against the price you charged; markup measures it against what the job cost you.
| Step | Example: $1,000 price, $700 cost |
|---|---|
| Profit | $1,000 − $700 = $300 |
| Margin | $300 ÷ $1,000 = 30% |
| Markup | $300 ÷ $700 = 42.9% |
This is the mistake that quietly erodes profit for a lot of trade businesses: a contractor who wants a 30% margin but instead adds a 30% markup to cost only nets a 23.1% margin ($700 × 1.30 = $910 price, profit $210, margin $210÷$910 = 23.1%) — a meaningful shortfall on every single job, all year.
Contractor Estimate Calculator (Excel & Google Sheets)
Build your target margin into every estimate automatically — materials, labor, markup, and profit, all auto-totaled so the price is right before you ever send the bid.
Which one should you price off of?
Price off margin, not markup, if you have a target profit percentage in mind — margin tells you directly what share of the customer’s payment is profit. If you instead only track markup, you can hit your markup target every time and still come in under your real profit goal, since markup is measured against a smaller base (cost) than price.
Check the rest of your pricing stack
Your margin is only as good as the cost number underneath it — make sure your labor burden rate is fully loaded before you calculate cost, and confirm your true hourly rate is baked into every quote.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit divided by price (what the customer paid); markup is profit divided by cost (what the job cost you). For the same job, margin is always a smaller percentage than markup whenever there is a profit.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup), both expressed as decimals. A 42.9% markup converts to a 30% margin: 0.429 ÷ 1.429 = 0.30.
What margin should a contractor target?
Many trade businesses target 20–40% gross margin depending on trade, market, and overhead, though the right number depends on your specific costs and competition. Track your actual margin per job rather than assuming a rule of thumb applies to you.
Is this profit margin calculator free?
Yes — free, no sign-up. Enter your job price and cost and read profit, margin, and markup instantly.