Markup vs. margin — the 60-second version
Markup is your profit as a percentage of cost. Margin is the same profit as a percentage of price. They describe the same dollars from two directions, which is why crews and bookkeepers talk past each other: a 100% markup is a 50% margin, not a 100% margin.
The conversions:
- Margin % = 100 × markup ÷ (100 + markup)
- Markup % = 100 × margin ÷ (100 − margin)
- Price = cost × (1 + markup ÷ 100)
Example: a part costs $40. At a 75% markup it sells for $70 — that's $30 of profit, a 42.9% margin. To hit a 50% margin instead, you'd need a 100% markup and an $80 price.
Markup → margin chart
| Markup % | Margin % | Cost $100 → Price |
|---|---|---|
| 10% | 9.09% | $110.00 |
| 15% | 13.04% | $115.00 |
| 20% | 16.67% | $120.00 |
| 25% | 20% | $125.00 |
| 30% | 23.08% | $130.00 |
| 40% | 28.57% | $140.00 |
| 50% | 33.33% | $150.00 |
| 66.67% | 40% | $166.67 |
| 75% | 42.86% | $175.00 |
| 100% | 50% | $200.00 |
| 150% | 60% | $250.00 |
| 200% | 66.67% | $300.00 |
| 300% | 75% | $400.00 |
Margin → markup chart
Working backward from a target margin? This table converts the margin you want into the markup you'd enter.
| Margin % | Markup % |
|---|---|
| 10% | 11.11% |
| 15% | 17.65% |
| 20% | 25% |
| 25% | 33.33% |
| 30% | 42.86% |
| 35% | 53.85% |
| 40% | 66.67% |
| 45% | 81.82% |
| 50% | 100% |
| 60% | 150% |
Common markup & margin questions
What is cost-plus pricing?
Cost-plus pricing means setting your price by adding a fixed markup on top of what an item cost you: price = cost × (1 + markup ÷ 100). Enter a cost and a markup above and the calculator does exactly this — a $40 part at 75% markup becomes $70.
How do I mark up labor?
Labor is marked up the same way as materials — on your loaded labor cost (wage plus taxes, insurance, and overhead). If a tech's loaded cost is $45/hour and you bill $90, that's a 100% markup and a 50% margin. Many shops carry a higher markup on materials than labor; the math is identical, so use the calculator for both.
What's a typical markup in the trades and construction?
It varies by item and trade, but a common pattern is high markups on low-cost consumables (200–400%) stepping down to 40–75% on big-ticket equipment. There's no single "right" number — what matters is covering overhead and hitting your target margin. That's why pricing by cost band beats one flat markup across the whole catalog.
Which should I use — markup or margin?
Use whichever your team and accounting already speak, but pick one and be consistent. Margin is better for comparing profitability across jobs (it's always a share of the sale); markup is more natural when pricing up from a cost. The calculator lets you enter either and shows both.
Why this matters for the trades
If your team quotes "30%" without agreeing on which one, a $1,000-cost job lands at either $1,300 (30% markup → 23% margin) or $1,429 (30% margin). Across hundreds of line items that gap is your entire profit. Set markup bands by cost range, write them down, and apply them consistently — that's exactly what Pricebookr automates across your whole catalog, with two-way Jobber sync. See how markup schedules work.