A 30% markup is not a 30% margin — and mixing the two up is a common way trade businesses underprice their work. Enter your job cost and the percentage you’re aiming for, and this markup vs margin calculator works out the selling price you need to hit that target.
Calculate your selling price
How to read your result
A water heater install costs you $850 in parts and labour. You want a 40% margin.
- Selling price: $850 ÷ (1 − 0.40) = $1,416.67
- Gross profit: $1,416.67 − $850 = $566.67
- Markup on that price: $566.67 ÷ $850 = 66.7% — which is why pricing it at “40% markup” ($1,190) would have left you well short of a 40% margin.
Markup is profit as a percentage of your cost. Margin is profit as a percentage of the selling price. The classic example: a job costs $100, you add a 30% markup, you charge $130 and keep $30. That $30 is 30% of your $100 cost (markup) — but only 23.1% of the $130 price (margin).
Which trades is this for?
Any trade that sells fixed-price work. If you quote a price instead of billing by the hour, this math applies to you.
- HVAC & plumbing: flat-rate price books depend on getting the margin right.
- Electrical: panel upgrades and installs quoted at a fixed price rather than by the hour.
- Landscaping: project quotes where materials and labour costs still need to leave room for your margin.
- Painting & cleaning: per-project and package pricing that accounts for your margin.
Assumptions & limits
- Prices exclude sales tax — add GST/HST or state sales tax on top of the selling price.
- Your cost should include everything for the job: materials, labour, subcontractors, and disposal or permit fees.
- Overhead (truck, insurance, office) isn’t part of this math. To fold that in, work out your true hourly cost first with the Fully Loaded Labour Rate Calculator.
- Percentages are capped at 95% and money results round to the nearest cent.
- This is a pricing aid, not financial advice — you decide what percentage to target.
Common questions
What’s the difference between markup and margin?
Markup = (price − cost) ÷ cost. Margin = (price − cost) ÷ price. Both measure the same dollars of profit, but markup divides by your cost and margin divides by the selling price.
Which one should I use to price jobs?
Margin. It tells you what share of every dollar you charge you keep, which needs to cover your overhead and leave a profit. Markup is useful for quick calculations on materials, but pricing a whole job on markup alone can leave you charging too little.
Why doesn’t a 30% markup give me a 30% margin?
Because margin divides by the bigger number. $100 cost plus 30% markup = $130 price. Your $30 profit divided by the $130 price is 23.1% margin. To keep 30% of the price, you’d need to charge $142.86.
What margin should my trade business target?
There’s no single right number — it depends on your overhead, your trade, and your market. A practical approach: work out your true hourly cost first (the labour rate calculator walks through it), then set a margin that covers overhead with profit left over.
Related free tools
Guides by trade
Worked examples showing how landscapers use this calculator with their own numbers:
Related reading
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