The markup vs margin trap (why so many jobs lose money)
Say a job costs you $1,000 and you want to "make 30%". If you add 30% markup, you charge $1,300 — but $300 profit on a $1,300 job is only a 23% margin. If you actually need 30% of the selling price to cover profit, the right price is $1,000 ÷ (1 − 0.30) = $1,429. Quoting the first number when you mean the second silently gives away 9% of every job. This calculator lets you pick either target and always shows you both equivalents.
Quick reference: markup ↔ margin
| Markup on cost | = Margin on price |
|---|---|
| 10% | 9.1% |
| 20% | 16.7% |
| 25% | 20% |
| 33.3% | 25% |
| 50% | 33.3% |
| 100% | 50% |
Getting the inputs right
- Labor: use the fully-burdened rate from our True Employee Cost Calculator, not the wage.
- Overhead: annual overhead ÷ annual direct costs = your overhead %. Recalculate yearly.
- Hours: if crews log time across sites, pull accurate hours from the Multi-Job-Site Time Card Calculator.
Frequently asked questions
What margin should a service business target?
After fully-loaded costs and overhead, many healthy service businesses target 15–25% net margin on jobs; specialty trades often price higher. Your market and competition set the ceiling — but know your floor: below your true cost plus overhead, you're paying to work.
Why does my price jump so fast at high margins?
Because price = cost ÷ (1 − margin). At 50% margin you divide by 0.5 (double the cost); at 80% you divide by 0.2 (five times). That's the correct math — margin percentages compound harder than markup percentages.
Where is my data stored?
Nowhere — calculations run entirely in your browser and nothing is uploaded.
Disclaimer: This tool provides pricing estimates for planning purposes. Check applicable tax rules for whether and how sales tax applies to your services in your jurisdiction.