Free contractor tool
Contractor Markup Calculator
Enter your job cost and target markup to instantly see your selling price, profit amount, and gross margin. Free — no sign-up required.
Total cost to you: materials, labor, subs, equipment
Most residential contractors use 20–35%
Selling price
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Markup amount
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Gross margin
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Markup quick reference
Selling price and gross margin at common markup percentages for your job cost. Enter your cost above to personalize this table.
| Markup % | Selling price | Profit | Gross margin |
|---|---|---|---|
| 15% | 1.15× cost | +15% of cost | 13.0% |
| 20% | 1.20× cost | +20% of cost | 16.7% |
| 25% | 1.25× cost | +25% of cost | 20.0% |
| 30% | 1.30× cost | +30% of cost | 23.1% |
| 35% | 1.35× cost | +35% of cost | 25.9% |
| 40% | 1.40× cost | +40% of cost | 28.6% |
| 50% | 1.50× cost | +50% of cost | 33.3% |
Markup vs. margin — what's the difference?
These two terms are often used interchangeably on job sites, but they calculate profit differently — and confusing them is one of the most common reasons contractors underprice their work.
Markup
Profit ÷ Cost × 100
Markup is based on your cost. A 30% markup means you add 30% of your cost on top. This is what most contractors use when quoting a job.
Gross margin
Profit ÷ Selling price × 100
Margin is based on your selling price. Your accountant and financial software report margin — it's always a lower percentage than the same markup.
The bottom line
A 30% markup is only a 23.1% gross margin. If your target is 30% margin, you need a 43% markup. Most contractors target markup — just make sure everyone on your team is using the same definition.
How to calculate contractor markup
Calculating your selling price with markup is straightforward once you know your total job cost. Follow these steps to determine your price:
- 1. Calculate your total job cost: Add up materials, labor, subcontractors, equipment rental, permits, and any other direct costs.
- 2. Choose your markup percentage: Most residential contractors use 20-35% depending on overhead, complexity, and market conditions.
- 3. Apply the formula: Selling Price = Cost × (1 + Markup% ÷ 100). For a $10,000 job with 30% markup: $10,000 × 1.30 = $13,000.
Your markup should cover overhead expenses (office rent, insurance, vehicles, tools), indirect labor costs, and your profit margin. If you're consistently winning every bid, your markup might be too low.
Frequently asked questions
- What is the difference between markup and margin?
- Markup is calculated as profit divided by cost. Margin is calculated as profit divided by selling price. A 30% markup equals a 23.1% gross margin. Contractors often say "markup" when quoting jobs, but accounting software reports "margin" — understanding both prevents underpricing.
- What markup percentage should a contractor use?
- Most residential contractors use 20–35% markup depending on trade, overhead costs, and local market. Specialty trades and complex projects often warrant 35–50%. The right markup covers overhead, labor burden, insurance, equipment, and profit.
- How do I calculate selling price from cost and markup?
- Selling price = Cost × (1 + Markup% ÷ 100). For example, a $10,000 job cost with 30% markup: $10,000 × 1.30 = $13,000 selling price.
SwiftBid applies your markup automatically
Enter your scope and markup once — SwiftBid generates a complete estimate with organized sections, line items, assumptions, and exclusions, then builds a branded proposal PDF ready to send. First estimate free, no credit card required.
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