Markup & Margin Calculator
Calculate selling price, markup percentage, and gross margin — and see why they are not the same number.
Margin = profit ÷ selling price
Markup and margin are NOT the same. A 30% markup results in only a 23.1% margin. Many contractors underprice by confusing the two.
Selling Price
$12,500.00
Gross Profit: $2,500.00
| Your Cost | $10,000.00 |
| Selling Price | $12,500.00 |
| Gross Profit | $2,500.00 |
| Markup % | 25.0% |
| Margin % | 20.0% |
Quick Reference: Markup vs. Margin
| Markup % | Margin % |
|---|---|
| 10% | 9.1% |
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 30% | 23.1% |
| 40% | 28.6% |
| 50% | 33.3% |
| 67% | 40.0% |
| 100% | 50.0% |
Markup = (Price − Cost) / Cost. Margin = (Price − Cost) / Price. These formulas are identical in dollar profit but different in percentage — always specify which one you mean when discussing bids.
Frequently Asked Questions
What is the difference between markup and margin?
Markup is profit divided by cost; margin is profit divided by price. Both use the same dollar profit amount but different denominators, which is why they always produce different percentages. A $2,000 profit on a $10,000 cost is a 20% markup, but on a $12,000 selling price it is only a 16.7% margin.
What markup should a contractor charge?
Most general contractors target 15–25% gross margin, which requires an 18–33% markup on cost. Specialty trades (electrical, plumbing, HVAC) often run 25–35% margin. Overhead-heavy firms with large offices or many salaried staff need higher margins to achieve the same net profit.
How do I calculate selling price from margin?
Selling Price = Cost ÷ (1 − Margin%). Example: a $10,000 cost at a 20% target margin = $10,000 ÷ (1 − 0.20) = $12,500. Never calculate it as Cost × (1 + Margin%) — that gives you a markup result, not a margin result.
Is a 10% profit margin good for a contractor?
10% net margin is average for general contractors. Top-performing firms achieve 15–20% net. Below 8% is thin for the risk level in construction — one bad project or slow-pay client can wipe the year. Gross margin needs to be higher (20–30%) to cover overhead before netting 10–15%.