Free tool
Markup & margin calculator
Markup and margin are not the same thing, and mixing them up quietly costs you money. Enter your cost, set a markup or a margin, and see the price, the profit, and both percentages side by side. Free, no sign-up.
What the job costs you: materials plus your labour at cost.
Markup
20.0%
Margin
16.7%
Notice the markup and the margin are different numbers for the same job. Figures update as you type.
Markup and margin both describe the profit on a job, but they measure it against different numbers, so they are never the same percentage. Confusing the two is one of the quietest ways trades lose money: you think you are making 20% and you are really making less. This calculator shows both at once so you always know which you are quoting.
Markup vs margin: the difference
The gap comes down to what you measure the profit against.
- Markup is your profit as a percentage of what the job cost you.
- Margin is that same profit as a percentage of what you charged.
Because the price you charge is always bigger than the cost, the margin is always a smaller percentage than the markup. The two formulas are:
Markup % = profit ÷ cost × 100.
Margin % = profit ÷ price × 100.
The mistake that costs you money
Say a job costs you £100 and you add 20%. That is £20 of profit and a £120 price. Your markup is 20%, but your margin, the profit as a share of the £120 you charged, is only 16.7%. If you quoted that job believing you were keeping a fifth of the price, you were not. Over a year of jobs, that gap adds up to real money left on the table.
Converting markup to margin
To turn a markup into a margin, divide the markup by one plus the markup. Here is how some common figures line up, so you can see how far apart they drift as they grow.
| Markup | Equivalent margin |
|---|---|
| 10% | 9.1% |
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 30% | 23.1% |
| 50% | 33.3% |
| 100% | 50.0% |
Notice a 100% markup, doubling your money, is only a 50% margin. That surprises a lot of people, and it is exactly why the two words are worth keeping straight.
Pricing for a target margin
Most of the time you should decide the margin you want to keep, then work back to the price. To do that, divide your cost by one minus the margin. For a 20% margin on a £600 job, that is £600 ÷ 0.8 = £750. Set the calculator to "Set margin", type your target, and it finds the price for you.
A worked example
Here is a £600 job with a 20% markup added, so you can see every figure at once.
| Your cost | £600.00 |
| Markup applied | 20% |
| Profit | £120.00 |
| Selling price | £720.00 |
| Actual margin | 16.7% |
Which should you use?
Think in margin when you care about profitability, because margin tells you what share of each job you actually keep. Use markup when it is simpler to add a set percentage onto a cost, but stay aware of the margin it really gives you. The habit that protects you is to name which one you mean every time, so a "20%" never gets mistaken for the wrong thing.
Don't forget your overheads
One caution: this calculator works out the markup or margin on a single job's direct cost. It does not, on its own, account for your general overheads, like the van, insurance and the hours you spend quoting. Those are carried by your day rate and how you price the whole job. Make sure the cost you type already includes a fair price for your labour, then add the margin on top. See how to price a job so you actually make a profit for the full build-up, and use the day rate calculator to get your labour cost right first.
Once your numbers are set, Snapquo keeps your priced items in one list so every quote carries the right margin without you redoing the sum. For the full explanation behind this tool, read markup vs margin for tradespeople.
This tool and guide are for general guidance, not financial or tax advice. The right margin for your work depends on your trade, costs and market. Treat the result as a starting point.
What is the difference between markup and margin?
Markup is your profit as a percentage of what the job cost you. Margin is that same profit as a percentage of what you charged. Because the selling price is bigger than the cost, the margin is always a smaller percentage than the markup. A 20% markup on a £100 cost gives a £120 price and £20 profit, which is only a 16.7% margin.
How do I convert a markup into a margin?
Divide the markup by one plus the markup. So a 25% markup is 0.25 ÷ 1.25 = 0.20, which is a 20% margin. This calculator shows both figures at once, so you never have to do it in your head.
How do I price for a target margin?
Divide your cost by one minus the margin you want. To make a 20% margin on a job that cost you £600, that is £600 ÷ 0.8 = £750. Set the calculator to "Set margin", type your target, and it works out the price for you.
Is a 50% markup the same as a 50% margin?
No, and this is the trap. A 50% markup on a £100 cost gives a £150 price, but the £50 profit is only a 33.3% margin of that price. If you meant to keep half, you have fallen well short. Always be clear which one you are quoting.
What margin should a tradesperson aim for?
A margin of around 15% to 25% on a fully-costed job is a healthy place to start, but it depends on your trade, your risk and your market. The important thing is to pick a margin on purpose rather than guessing, and to make sure your cost figure already includes a fair price for your labour.
Does this include my overheads?
No. This works out the markup or margin on a single job's direct cost. Your general overheads, like the van, insurance and the hours spent quoting, are covered separately through your day rate and how you price the whole job. Make sure your cost figure includes your labour before you add the margin on top.
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