Contractor Markup vs. Margin Calculator
Convert between markup and margin, and calculate selling price, cost, and profit for your contracting projects.
Project Cost & Percentage
Formulas Used
From Markup:
- Selling Price = Cost × (1 + Markup% ÷ 100)
- Profit = Selling Price − Cost
- Margin% = (Profit ÷ Selling Price) × 100
From Margin:
- Selling Price = Cost ÷ (1 − Margin% ÷ 100)
- Profit = Selling Price − Cost
- Markup% = (Profit ÷ Cost) × 100
Conversion shortcuts:
- Margin% = Markup% ÷ (1 + Markup% ÷ 100) × 100
- Markup% = Margin% ÷ (1 − Margin% ÷ 100) × 100
Assumptions & References
- Cost includes all direct costs: labor, materials, subcontractors, equipment, and permits.
- Markup is applied to cost and must be ≥ 0%. There is no upper mathematical limit, but typical contractor markups range from 10%–50%.
- Margin must be between 0% and 100% (exclusive). A 100% margin would require infinite selling price.
- Overhead and profit (O&P) in insurance restoration work commonly uses 10% overhead + 10% profit, equating to a ~20% markup on net cost.
- Gross margin (used here) differs from net margin, which would subtract additional overhead from profit.
- Reference: Construction Financial Management Association (CFMA) — Financial Benchmarker; Craftsman Book Company — Contractor's Pricing Guide.