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Markup is measured against your cost. Margin is measured against the price. Confusing the two is the most common pricing mistake in the trades, and it is expensive.
Add 30% to a $1,000 job and you charge $1,300. Your profit is $300 - but that is 23% of the $1,300 the customer paid, not 30%. The markup was 30%. The margin was 23%.
That seven-point gap is invisible on one job and ruinous across a year. A contractor who thinks they are running a 30% margin, but is really running 23%, has priced a whole season on a number that was never true.
The last one is the useful direction and the one people rarely run. To land a 30% margin you need a 42.9% markup. To land 40% you need 66.7%. Margin above 50% climbs steeply, and a 100% margin is impossible - the price would have to be infinite.
Once you know your number, it should live in your pricing rather than your head. FastEstimateMaker applies a default markup to recorded costs when it builds an estimate, so the price starts correct instead of being corrected later. See how estimates get built.
No. A 30% markup on $1,000 of cost gives a $1,300 price and $300 of profit, which is a 23% margin. To actually earn a 30% margin you need a 42.9% markup.
A 100% markup. Doubling your cost gives you a 50% margin, because half of what the customer pays is profit. Margins above 50% climb very steeply - 60% needs a 150% markup.
Not necessarily. Many contractors mark up pass-through costs like materials and subcontractors, and bill labor at a set rate instead. What matters is that the combined price clears the margin your business needs.
No. Nothing you type is transmitted or stored - the math runs in your browser. There is no account and no email.
See all contractor tools, or jump to AI estimates that apply your markup automatically.
Compare the hours and costs you quoted against what the job actually took.
Work back from the take-home you want, your overhead, and the hours you can actually bill.
A payment schedule from a job total - deposit, progress draw, and balance, the three payments you will actually collect.
Load payroll taxes, comp, benefits, and paid time off into the true hourly cost of a crew member.
Trade-by-trade launch costs, the monthly bills that start on day one, and your runway.
Fixed costs divided by what a job really contributes - the first number a new business should know.
The all-in monthly cost, the cost on every job, and the extra jobs a month that carry it.
The profit that truly replaces a W2 - benefits and self-employment tax included.
FastEstimateMaker applies your markup when it builds the estimate, so the price is right before it reaches the customer. Start free - no credit card required.
Build a real estimate freeSolo is $29.99/month with every office feature. Canvass is $59.99/month plus $19.99/month per rep seat.
