Markup and margin calculator
Markup is profit as a percent of cost; margin is profit as a percent of the sell price. The same profit gives a smaller margin than markup: a 25% markup is a 20% margin, and a 20% margin takes a 25% markup.
Enter a cost and either percent; the calculator works out the other one, the sell price and the gross profit. It runs in your browser; nothing you type is saved or sent.
How do you convert markup to margin?
Divide the markup by one plus the markup. To go the other way, divide the margin by one minus the margin. Write both as decimals first.
margin = markup ÷ (1 + markup) markup = margin ÷ (1 − margin) sell price = cost × (1 + markup) = cost ÷ (1 − margin) gross profit = sell price − cost
The gap between the two grows with the numbers: a 10% markup is a 9.1% margin, 0.9 points apart, and a 50% markup is a 33.3% margin, 16.7 points apart. Our guide, markup vs margin in an electrical bid, has conversion tables both ways and shows how overhead and profit compound when you apply them one after the other.
What happens if you use a 20% markup for a 20% margin?
This is an example, not a benchmark. The $80,000 cost is the calculator's starting value, a round number.
| Example job | 20% markup | 20% margin |
|---|---|---|
| Cost | $80,000 | $80,000 |
| Calculation | $80,000 × 1.20 | $80,000 ÷ (1 − 0.20) |
| Sell price | $96,000 | $100,000 |
| Gross profit | $16,000 | $20,000 |
| Margin | 16.7% | 20.0% |
| Markup | 20.0% | 25.0% |
Typing a 20% margin target into a markup field sells the job for $96,000 instead of $100,000: $4,000 less profit, at a 16.7% margin. At the calculator's starting values, $80,000 at a 25% markup sells for $100,000, a 20.0% margin.
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What's the difference between markup and margin?
Markup is profit as a percent of cost, and margin is profit as a percent of the sell price. The profit dollars are the same; only the base changes. Because the sell price is always larger than the cost, the margin is always the smaller number: a 25% markup on cost is a 20% margin on the sell price.
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How do you convert markup to margin, and margin to markup?
Write both as decimals. Margin = markup ÷ (1 + markup), so a 25% markup is 0.25 ÷ 1.25, a 20% margin. Markup = margin ÷ (1 − margin), so a 20% margin is 0.20 ÷ 0.80, a 25% markup. The sell price is cost × (1 + markup), or cost ÷ (1 − margin).
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What markup do electrical contractors use?
There is no single figure worth borrowing. The markup a shop needs depends on its overhead, which differs with its size, office staff, insurance and how much work it has, and on the profit it is aiming for, which changes with the market and the job. Work yours out from your own books: take overhead as a percent of your cost, then convert your profit target to a markup with the calculator above, and apply the two in order.
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Can a margin be 100% or more?
No. Margin is profit divided by the sell price, and profit can't be larger than the sell price, so a margin stays below 100%. Markup has no ceiling: doubling your cost is a 100% markup and a 50% margin. The calculator refuses a margin of 100% or more.
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Does this calculator save or send what I type?
No. The calculator runs entirely in your browser. Nothing you enter is saved or sent anywhere, and no account is needed.
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How do I use the result in TakeOn?
TakeOn's Bid Summary takes profit as a markup, in a field labelled Profit markup (% of cost), and shows the gross margin that markup produces under the field. It doesn't accept a target margin directly, so if your target is a margin, convert it to a markup here and enter the markup. The profit markup applies to cost plus overhead.
From margin target to bid
See markup and margin side by side.
TakeOn's Bid Summary shows the margin your profit markup produces, next to the sell price. No credit card needed.