Pure arithmetic on the numbers you enter. No regional pricing is assumed. Use it to sanity-check a bid before you send it.
Markup vs margin, and why it costs you money
Underpricing is the quiet killer in the trades, and most of it comes from one mix-up: treating markup and margin as the same thing. They are not. This calculator takes your real costs, lets you target either one, and shows the price to charge, the profit in dollars, your true margin, your true markup, and the break-even floor, all on one screen.
The two are not the same
Markup is profit measured against your cost. Margin is profit measured against your price. Same dollar of profit, two different denominators, so the percentages never match (except at zero).
Markup % = profit ÷ total cost
Margin % = profit ÷ price
Worked example on a job that costs $100:
- Add a 50% markup: price is $100 × 1.50 = $150. Profit is $50, but that is only a 33.3% margin ($50 ÷ $150).
- Want a 50% margin instead: price is $100 ÷ (1 − 0.50) = $200. Profit is $100, which is a 100% markup.
Charge a 50% markup thinking it is a 50% margin and you leave $50 on the table on a $100 job. Scale that across a year of work and it is real money.
How the price is calculated
First we add up your direct costs (material + labor + other). Then we layer in overhead and your target.
With a target margin and flat overhead:
Price = (direct costs + overhead) ÷ (1 − margin)
With a target markup and flat overhead:
Price = (direct costs + overhead) × (1 + markup)
When overhead is a percent of price, overhead and price depend on each other, so the tool solves them together (for a margin target, Price = direct costs ÷ (1 − overhead% − margin)). You always get a price that actually delivers the target you set.
Break-even is your floor
Break-even price is direct costs + overhead with zero profit. It is the number you cannot go below without losing money on the job. Knowing it before you negotiate keeps you from "buying" work that quietly costs you to do.
Pro tips
- Price from a target margin, not a markup. Margin is the number that actually shows up in your bank account per dollar billed.
- Always include overhead. Rent, trucks, insurance, software, and admin time are real costs even when they are not on the job ticket.
- Put "other direct costs" to work: permits, equipment rentals, dump fees, and subcontractors all belong here, not buried in labor.
- If a customer wants a discount, check it against your break-even first so you never cut into your own pocket.
- Be consistent. Pick margin or markup as your standard so every estimate is comparable.
How this compares to the paid tools
Real job costing is usually locked behind a subscription. Jobber gates margin tracking in its Grow plan (around $149 a month and up), and Buildertrend and Housecall Pro bundle it into higher tiers too. The free markup calculators those companies publish are deliberately bare, one box in and one number out. This tool puts markup, margin, overhead, break-even, and the target price together on one screen, for free, with no signup.
Frequently asked questions
What is the difference between markup and margin?
Markup is profit measured against your cost, while margin is profit measured against your price. A 50% markup on a 100 dollar cost gives a 150 dollar price, but that is only a 33.3% margin. They describe the same dollar of profit from two different angles, so they are never equal except at zero.
How do I find the price for a target margin?
Divide your total cost by one minus the margin written as a decimal. For a 30% margin on 8,750 dollars of total cost, price equals 8,750 divided by 0.70, which is 12,500 dollars. This calculator does it for you and also handles overhead as a percent of price.
Should overhead be a percent of price or a flat dollar amount?
Either works. A flat dollar amount is simplest for a single job, like adding a fixed allocation for trucks and insurance. A percent of price is common when you spread fixed overhead proportionally across revenue. This tool supports both and recalculates the price correctly for each.
What is break-even price?
Break-even price is the total of your direct costs plus overhead with zero profit. Charge below it and you lose money on the job. This calculator shows your break-even so you always know the floor before you add your margin or markup.
Why do contractors underprice jobs?
Most underpricing comes from confusing markup with margin and from forgetting overhead. Adding a 20% markup feels like a 20% margin, but it is only about 16.7%, and if overhead is not included the real profit can vanish. Pricing from a target margin with overhead built in fixes both mistakes.
Pro version coming soon
Track real margins across every job.
The Pro version tracks actual job costs and margins across all your work with profit dashboards, so you always know what is making money.
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