Markup needed for a target margin
Markup and margin are different percentages of the same profit. To keep a given margin, you have to mark your cost up by more than that number.
| Target margin | Markup needed | Price on $1,000 cost |
|---|---|---|
| 10% | 11.1% | $1,111.11 |
| 15% | 17.6% | $1,176.47 |
| 20% | 25% | $1,250.00 |
| 25% | 33.3% | $1,333.33 |
| 30% | 42.9% | $1,428.57 |
| 35% | 53.8% | $1,538.46 |
| 40% | 66.7% | $1,666.67 |
| 50% | 100% | $2,000.00 |
Markup vs margin
Markup is profit as a percentage of your cost. Margin is profit as a percentage of the selling price.
A job that costs you $1,000 and sells for $1,250 makes $250. That is a 25% markup ($250 ÷ $1,000) and a 20% margin ($250 ÷ $1,250).
If you want a 20% margin and you mark up your cost by 20%, you get a 16.7% margin. Use the table above, or type the margin into the calculator and it sets the markup for you.
Read the full guide to markup and margin
Formulas
Price = Cost × (1 + Markup)
Price = Cost ÷ (1 − Margin)
Markup = Profit ÷ Cost
Margin = Profit ÷ Price
Markup = Margin ÷ (1 − Margin)