Contractor Markup Calculator
Enter your job costs, choose a markup, and see the exact selling price, profit dollars and gross margin — with a table showing what your markup means as a margin, so the two never get mixed up again.
Price = Cost × (1 + Markup)$1,650.00 × 1.25 = $2,062.50A 25% markup equals a 20.0% margin — they are not the same number. The table below shows why.
Markup → margin conversion
The most expensive mistake in contractor pricing: assuming a 20% markup produces a 20% margin. It produces 16.7%. Price to a target margin with Price = Cost ÷ (1 − Margin), not Cost × (1 + Markup).
| Markup on cost | Equivalent margin on price |
|---|---|
| 10% | 9.1% |
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 30% | 23.1% |
| 40% | 28.6% |
| 50% | 33.3% |
| 75% | 42.9% |
| 100% | 50.0% |
Remodeling: where the number comes from
A remodeling contractor quotes a small bathroom refresh: two days of installer time, tile and fixture materials, and a plumber for one fixture set.
| Input | Value |
|---|---|
| Labor | $800 (2 days × 1 installer) |
| Materials | $600 |
| Other direct | $100 (plumber sub) |
| Overhead allowance | 10% |
| Markup | 25% |
Result: Quote $2,062.50 — $412.50 gross profit, a 20% margin
The 25% markup only produces a 20% margin. If this contractor needs a true 25% margin, the price would be $1,650 ÷ 0.75 = $2,200 — $137.50 more on one job.
Load this example into the calculatorThe calculation
| Direct cost | $800 + $600 + $100 = $1,500.00 |
| Overhead | $1,500 × 10% = $150.00 |
| Total cost | $1,650.00 |
| Price | $1,650 × 1.25 = $2,062.50 |
| Profit | $2,062.50 − $1,650 = $412.50 |
| Margin | $412.50 ÷ $2,062.50 = 20.0% |
How this calculator works
Every result comes from the formulas below — the math shown is the math used. Change any input and results update instantly in your browser; nothing is sent to a server.
- Selling price from markup:
Price = Total Cost × (1 + Markup ÷ 100)Markup is the percentage added on top of your cost. - Profit:
Profit = Price − Total Cost - Gross margin:
Margin % = Profit ÷ Price × 100Margin is profit as a share of the selling price, not of cost. - Margin from markup (conversion):
Margin % = Markup ÷ (100 + Markup) × 100A 25% markup is only a 20% margin — the table below shows the full conversion.
What the result means
The recommended price is the amount that recovers every cost you entered plus the profit your markup implies. The margin next to it is the share of that price you keep — compare it against your overhead as a percentage of revenue to see what's left for net profit.
When to use it
Use it when you know your costs and think in markup — and want to see what that markup really means as a margin before the quote goes out.
Common mistakes
- Treating markup and margin as interchangeable — a 20% markup is a 16.7% margin.
- Forgetting overhead entirely: a price that covers only labor and materials loses money on every job.
- Copying a competitor's markup without knowing their cost structure is nothing like yours.
Frequently asked questions
What markup should a contractor use?
Most residential contractors price with markups between roughly 20% and 50% on top of direct job costs, depending on trade, risk and how much overhead they carry. There is no universal number: the right markup is the one that covers your overhead and leaves your target net profit. Use your own overhead and profit goals to back into it rather than copying a competitor.
Is 30% markup the same as 30% margin?
No. A 30% markup on $1,000 of cost gives a $1,300 price and $300 profit — which is a 23.1% margin, because margin is measured against the selling price. Pricing to a '30% margin' requires a markup of about 42.9%.
What is the difference between markup and margin?
Markup is calculated on cost: Price = Cost × (1 + markup). Margin is calculated on price: Margin = Profit ÷ Price. Mixing them up is one of the most common and expensive pricing mistakes contractors make — a 20% markup produces only a 16.7% margin.
Should I mark up materials and labor the same?
Not necessarily. Many contractors apply a lower markup to labor (which already includes their own wage) and a higher markup to materials. Others price the whole job from a fully burdened cost plus a single target margin. What matters is that overhead recovery and profit are covered somewhere in the total.
Want to see what percentage of the selling price is actually profit?
Check the margin on this price →Related tools and guides
Contractor Markup Calculator is part of RateCraft, a set of free pricing and estimating tools for contractors and service businesses. Results are calculated entirely in your browser and are estimates for planning purposes — see our disclaimer and methodology.