20% markup
Cost = $100
Selling price = $120
Profit = $20
True margin = 16.67%
FREE CONTRACTOR CALCULATOR
Contractor Markup & Margin Calculator
Turn a known cost base into a selling price using either markup or target margin — and see the true profit, markup and margin side by side.
Free to use. No sign-up required. Your figures stay in your browser.
WHY THE DISTINCTION MATTERS
Markup and margin are not the same percentage
Markup compares the amount added with the cost base. Margin compares the profit amount with the selling price. Using the same percentage for both therefore produces different prices.
20% target margin
Cost = $100
Selling price = $125
Profit = $25
Equivalent markup = 25%
The formulas
Markup method: Selling Price = Cost × (1 + Markup)
Target-margin method: Selling Price = Cost / (1 − Margin)
Equivalent markup from margin: Markup = Margin / (1 − Margin)
What should you enter as the cost base?
The calculator deliberately does not decide this for you. A contractor may need to account for materials, self-performed labor, subcontractors, equipment, delivery, disposal, other project-specific costs, and the business's chosen company-level cost treatment. The exact classification and recovery method depends on the business.
Use your own current project information and financial records. If you are uncertain how business overhead, payroll burden, tax, owner compensation, depreciation, or other company costs should be classified, obtain appropriate accounting or professional advice.
Do not use a larger markup to repair an incomplete estimate. This calculator checks commercial arithmetic. It cannot tell you whether scope is missing, a labor assumption is realistic, a supplier price is current, or a subcontract quote covers the same work.
Frequently asked questions
Is markup the same as margin?
No. Markup compares the addition with cost; margin compares profit with selling price. A 20% markup on $100 cost gives a $120 selling price and a margin of about 16.67%.
How do I calculate a selling price from a target margin?
Use Selling Price = Cost / (1 − Margin). A $100 cost base with a 20% target margin therefore requires a $125 selling price.
Does this calculator tell me what markup or margin I should use?
No. It checks the mathematics once you choose the inputs. A real contractor's overhead method and commercial targets must come from the business's own financial information and decisions.
Does a target margin guarantee that profit on the completed job?
No. Actual results can change through quantity errors, labor overruns, rework, price changes, scope changes, subcontractor issues and project conditions that differ from the estimate.