Free markup and margin calculator

Markup vs. margin: what’s the difference?

Markup and margin measure the same profit against different amounts. Markup compares profit with cost. Margin compares profit with selling price. Profit here means the selling price minus the costs you entered.

Markup = (selling price − cost) ÷ cost × 100

Margin = (selling price − cost) ÷ selling price × 100

If a job costs $5,000 and you charge $6,250, the $1,250 difference is 25% of cost but only 20% of the selling price. That’s why adding 25% to your cost doesn’t give you a 25% profit margin.

Example: 25% markup compared with 25% margin

For a fictional construction job, assume $5,000 in estimated costs. The percentages below illustrate the difference between the two methods; they aren’t recommended pricing targets.

With markup, $5,000 × 1.25 = $6,250. The $1,250 profit divided by the $6,250 price gives a 20% margin.

With margin, $5,000 ÷ 0.75 = $6,666.666…, displayed as $6,666.67. The unrounded profit is $1,666.666…, which is 25% of that unrounded selling price. Dollar results display to two decimal places, so a check using the displayed amounts can differ slightly because of rounding.

How to calculate selling price

Using markup

Select Markup, enter Your cost, then enter Markup (%). The calculator adds the chosen percentage of cost to that cost.

Selling price = cost × (1 + markup ÷ 100)

It shows selling price, profit, and the corresponding margin. For example, enter 25 for a 25% markup, rather than 0.25.

Using margin

Select Margin, enter Your cost, then enter Target margin (%). A 25% margin leaves 75% of the selling price to cover your entered cost, so the calculator divides the cost by 0.75.

Selling price = cost ÷ (1 − margin ÷ 100)

It shows selling price, profit, and the corresponding markup. To convert markup to margin, use Markup mode and read the Margin result. To convert a target margin to markup, use Margin mode and read the Markup result.

Inputs and validation

Markup is selected initially, and both input fields start blank. Switching modes keeps the cost and percentage you’ve entered but recalculates their meaning. Check the selected mode before using the result. Clear inputs empties both fields and returns to Markup mode.

Cost and percentage accept nonnegative decimals. Both must be entered to get a result. Zero markup or margin returns a selling price equal to cost. Markup can be 100% or more, but a target margin must be less than 100%. Negative, invalid, or non-finite calculations don’t produce a result. Dollar results display in US dollars to two decimal places, and percentages display with up to two decimal places.

Common contractor pricing mistakes

• Mixing up markup and margin. Check whether the percentage is measured against cost or selling price before quoting the job.
• Adding the target margin to cost. Use Margin mode when your target is a share of selling price. Simply adding 25% to cost produces a 20% margin in the example above.
• Leaving expenses out of the cost basis. Include the costs you expect to bear, including any allocated overhead. See the job pricing calculator for a breakdown of cost categories and overhead.
• Treating estimated profit as actual profit. The result subtracts only the cost you entered. Missing expenses or costs that rise during the job reduce what remains.
• Ignoring possible overruns. Review uncertain costs before settling on a price. A target margin doesn’t protect profit if costs increase while the quoted price stays fixed.

What this calculator can tell you

The calculator finds a selling price for your entered cost and chosen percentage. It doesn’t determine the right markup for your business, check local prices, guarantee profitability, or add expenses you leave out. There are no separate inputs for materials, labor, overhead, or sales tax.

Use the labor cost calculator to work out a crew allowance and the job pricing calculator to total the wider job costs. Once you’ve reviewed the price, describe the scope and charges in a contractor estimate.

This calculator doesn’t track actual job expenses or create an estimate for you. Its calculations don’t transfer into Cinderblock. Keep your cost assumptions with the estimate so you can compare them with actual spending later.