HOW TO USE IT
How to use the Contractor Markup Calculator
- 1
Calculate your complete job cost, including labor, materials, subcontractors and allocated overhead.
- 2
Enter the percentage you want to add on top of that cost.
- 3
Review the suggested selling price and gross profit dollars.
- 4
Check the resulting margin before using the price in an estimate.
THE MATH
Markup pricing formula
Selling price = job cost × (1 + markup percentage)Markup is measured against cost. Margin is measured against selling price, so the two percentages are not interchangeable. A 25% markup produces a 20% gross margin.
PRACTICAL EXAMPLE
Adding 25% markup to a $7,000 cost
A job that costs $7,000 with a 25% markup receives $1,750 in gross profit dollars and a suggested selling price of $8,750. The resulting gross margin is 20%.
FAQ
Frequently asked questions
Is markup the same as profit margin?
No. Markup divides profit by cost, while margin divides profit by selling price.
Should overhead be in job cost?
Include the portion of overhead that your pricing method allocates to the job before applying markup.
What markup should a contractor use?
There is no universal percentage. It depends on your complete costs, capacity, risk, market and profit target.
Does the result include sales tax?
No. Tax rules vary by location and type of work. Add applicable taxes only after checking current local requirements.