General
Job Markup Calculator
Price jobs correctly by calculating the right markup, margin, and final selling price.
Markup vs. Margin: A 30% markup means you add 30% to cost - that’s only a 23.1% gross margin. A 30% margin means 30% of the price is profit - that requires a 42.9% markup. Most contractors confuse these. Use margin % to reverse-engineer your price from a profit target.
How to figure your markup on a job
Markup is the difference between what the job costs you and what you charge the customer. If your materials and labor cost $5,000 and you charge $7,500, your markup is 50 percent. Your markup needs to cover overhead, insurance, truck costs, callbacks, and profit. A lot of contractors undercharge because they do not account for all of their real costs.
Markup vs profit margin
These are not the same thing. A 50 percent markup does not mean 50 percent profit. If you mark up a $10,000 job by 50 percent, you charge $15,000. Your profit is $5,000 on a $15,000 job, which is a 33 percent margin. Markup is calculated on cost. Margin is calculated on selling price. This calculator shows you both so there is no confusion.
What markup should contractors use?
Most contractors mark up materials 20 to 50 percent and labor 50 to 100 percent. Overall job markups typically range from 30 to 60 percent depending on the trade, market, and complexity of the work. Specialty work commands higher markup. Emergency and after hours work should be marked up more. If you are not sure where to start, 50 percent overall markup is a reasonable baseline for most trades.
Common Questions
Should I charge more for rush jobs?
Absolutely. A rush premium of 25 to 50 percent is standard in the trades. You are rearranging your schedule and possibly paying overtime to make it happen. The customer is paying for priority.
How do I price a job I have never done before?
Break it into tasks you do know how to price. Get material quotes, estimate your hours honestly, then add 15 to 20 percent extra for the learning curve. Underbidding a new type of work is how guys lose their shirt.
Do I charge markup on subcontractor work?
Yes. You are managing the sub, handling the customer, and putting your name on the job. A 10 to 20 percent markup on sub work is standard and covers your coordination and liability.
What if the customer says my price is too high?
Do not drop your price. Explain what is included and what it costs you to do the job right. If they want a lower price, offer to reduce the scope. Cutting your margin is a fast track to going broke.
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