Contractor Markup and Profit Margin Calculator
Calculate your markup percentage, profit margin, and selling price based on your total job costs and desired profit. Understand the difference between markup (based on cost) and margin (based on revenue).
Formulas Used
Overhead Amount = Direct Job Cost × (Overhead Rate ÷ 100)
Total Cost = Direct Job Cost + Overhead Amount
From Markup %:
Selling Price = Total Cost × (1 + Markup% ÷ 100)
Profit Margin % = (Profit ÷ Selling Price) × 100
From Profit Margin %:
Selling Price = Total Cost ÷ (1 − Margin% ÷ 100)
Markup % = (Profit ÷ Total Cost) × 100
From Known Selling Price:
Profit = Selling Price − Total Cost
Markup % = (Profit ÷ Total Cost) × 100
Margin % = (Profit ÷ Selling Price) × 100
Key distinction: Markup is profit as a % of cost; Margin is profit as a % of revenue. A 20% markup equals a 16.67% margin.
Assumptions & References
- Reference: Construction Financial Management Association (CFMA) — Financial Survey of the Construction Industry.