Markup vs Profit Margin Calculator
Never mix up markup and profit margin again. Calculate your true selling price, cash profit, and percentage return on any trade quote.
Job Cost & Percentage Settings
All direct costs: trade materials, waste/skips, labour hours, and allocated travel.
To achieve your 20% profit margin, you must quote £1,875.
The Crucial Difference Between Markup and Margin
Confusing markup with margin is one of the most common causes of unexplainable cashflow problems for sole traders and contractors.
Markup = (Profit ÷ Cost) × 100
Markup is the percentage you add on top of your buying cost. If materials and labour cost £1,000 and you add 25% markup (£250), your selling price is £1,250.
Margin = (Profit ÷ Selling Price) × 100
Profit margin is the share of the final quote that you keep. In the example above, £250 profit on a £1,250 quote is a 20% margin (£250 ÷ £1,250), NOT 25%!
| Cost Markup Added | Actual Gross Profit Margin | Cost Example | Quoted Selling Price |
|---|---|---|---|
| + 15% Markup | 13.0% Margin | £1,000.00 | £1,150.00 |
| + 20% Markup | 16.7% Margin | £1,000.00 | £1,200.00 |
| + 25% Markup | 20.0% Margin | £1,000.00 | £1,250.00 |
| + 33.3% Markup | 25.0% Margin | £1,000.00 | £1,333.00 |
| + 50% Markup | 33.3% Margin | £1,000.00 | £1,500.00 |
Markup & Margin FAQs
Straightforward guidance on pricing formulas and trade margins.