Free tool · Pricing
A 20% markup is not a 20% margin.
It's one of the most expensive mix-ups in pricing. Enter a cost and a markup to see the margin you're really making, or start with the margin you want and get the markup you need.
Why the numbers differ
Markup is figured on cost. Margin is figured on price.
Add 20% to a $100,000 job and you charge $120,000. Your $20,000 profit is 20% of the cost, but only 16.7% of the price. If you plan your overhead and profit around 20%, every job comes up short, and the gap grows with every bid.
Quick reference
Markup and the margin it really gives you
| Markup | Real margin |
|---|---|
| 10% | 9.1% |
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 30% | 23.1% |
| 40% | 28.6% |
| 50% | 33.3% |