Markup & margin calculator

What’s the difference between markup and margin?

They’re both “profit as a percentage” — they just divide by a different number. Markup divides profit by cost: “I’m adding 50% on top of what this cost me.” Margin divides the same profit by the selling price: “50% of what I charge is profit.” Same dollars, two different percentages, and the gap between them gets wider the higher either number goes.

A $100 job marked up 50% sells for $150 — $50 profit on a $150 price is a 33.3% margin, not 50%. To get an actual 50% margin on that same $100 cost, the price has to be $200, which is a 100% markup. That gap is exactly what this calculator is for: put in one and see the other, instead of assuming they match.

How to use it to price a job

Start with an honest total for what the job costs — materials at what you’ll actually pay, your labour at an hourly rate you’d want to be paid, and a share of overhead. That’s the full method behind how to price a job so the number holds up; this calculator picks up from that total. Enter it as the cost here, then decide whether you think in margin or markup — trades and retail conversations often use markup, while “what share of this invoice is profit” is a margin question — and the other percentage shows up as an output either way.

If the price it gives you feels too low once you factor in risk on an unpredictable job, raise the percentage rather than second-guessing the formula — the calculator will show you immediately what that does to both numbers.

Common questions

What’s the difference between markup and margin?

Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A 50% markup and a 50% margin land on completely different prices — a $100 job marked up 50% sells for $150, but a $100 job with a 50% margin sells for $200. Same profit percentage, different base, different price.

Which one should I use to price a job?

Margin is usually the more useful number to plan around, because it tells you what share of the invoice is actually profit — which is what covers your slow weeks and your own pay. Markup is more common in retail and trades pricing conversations because it’s a simple percentage on top of a known cost. This calculator shows both from the same numbers, so you can quote in whichever one your industry expects and still know your real margin.

Why does a 100% markup only give a 50% margin?

Because markup divides profit by cost, and margin divides the same profit by the (larger) selling price. Doubling your cost as profit — a 100% markup — means profit is exactly half of the final price, which is a 50% margin. The two numbers converge only at 0%; the higher they go, the further apart they drift.