Markup
Markup measures gross profit against the job cost. A 30% markup adds $300 to $1,000 of cost.
Selling price = cost × (1 + markup)Free contractor pricing tool
Margin and markup are not the same number.
Use the same job cost and percentage to compare both pricing methods before you send an estimate. Built for solo painters, cleaners, handymen and small maintenance crews.
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See the price difference before it becomes a profit problem.
Markup compares profit with your cost. Margin compares profit with the selling price. If a job costs $1,000 and you add 30%, that is a 30% markup—but the resulting gross margin is only 23.08%. Enter your own numbers below to compare the two methods.
Two formulas. Two different answers.
Margin
Margin measures gross profit against the selling price. A 30% margin keeps 30 cents of each sales dollar before costs not included in your job-cost figure.
Selling price = cost ÷ (1 − margin)A $1,000 job at “30%”
Adding a 30% markup produces a $1,300.00 selling price and a 23.08% margin. Pricing for a true 30% margin produces a $1,428.57 selling price. The difference is $128.57 on the same cost base.
| Percentage entered | Price with same markup | Actual margin | Price for target margin | Equivalent markup |
|---|---|---|---|---|
| 10% | $1,100.00 | 9.09% | $1,111.11 | 11.11% |
| 20% | $1,200.00 | 16.67% | $1,250.00 | 25.00% |
| 25% | $1,250.00 | 20.00% | $1,333.33 | 33.33% |
| 30% | $1,300.00 | 23.08% | $1,428.57 | 42.86% |
| 35% | $1,350.00 | 25.93% | $1,538.46 | 53.85% |
| 40% | $1,400.00 | 28.57% | $1,666.67 | 66.67% |
| 50% | $1,500.00 | 33.33% | $2,000.00 | 100.00% |
Before you choose a selling price
- Count paid labor—including your own working time.
- Count materials, supplies and job consumables.
- Add rentals, disposal, travel and permit costs when applicable.
- Include the share of overhead this job must carry.
- Check the approved scope, assumptions and exclusions.
- Separate applicable taxes instead of treating them as profit.
- Document customer-requested changes before extra work begins.
- Compare estimated costs with actual costs after closeout.
Gross margin is not take-home pay.
The result is only as complete as the costs you enter. Uncounted overhead, taxes, callbacks, discounts, financing charges and unpaid time can reduce what remains. This calculator explains the math; it does not prescribe a percentage or replace accounting, tax or legal advice.
Ready for the complete workflow?
Price, document, follow up and close out the job.
The Contractor Quote & Follow-Up Kit includes a working cost-and-margin calculator, scope worksheet, estimate layout, follow-up templates, closeout checklist and project backup.
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