Estimating basics
Markup and Margin Calculator
Markup and margin are both profit as a percentage, but of different things, so the same number means different prices. Enter your cost, pick markup or margin as the starting point, and see the selling price, the profit and the equivalent of the other percentage. Add overhead or sales tax if you want them in the price.
Result
Planning estimate- Selling price
- 11,500.00
- Profit
- 1,500.00
- Margin
- 13.04 %
- Markup
- 15.00 %
- Conversion
- 15% markup = 13.04% margin
Profit divided by selling price.
Profit divided by cost.
Margin = markup / (1 + markup). Markup = margin / (1 - margin). Margin is always the smaller number.
How it is calculated
- 1 Cost with overhead = cost x (1 + overhead % / 100). With no overhead this is just your cost.
- 2 Starting from markup: selling price = cost with overhead x (1 + markup % / 100).
- 3 Starting from margin: selling price = cost with overhead / (1 - margin % / 100).
- 4 Profit = selling price - cost with overhead. Margin = profit / selling price. Markup = profit / cost with overhead.
- 5 Sales tax = selling price x tax % / 100, added on top of the price and not counted as profit.
Assumptions to confirm
- Defaults
- A cost of 10,000 and a 15% markup are only an example so the results show on first load. They are not a recommended markup for any trade or product.
- Overhead
- Overhead is added to cost before profit, so markup and margin are measured on the loaded cost. It defaults to 0. Set it only if you want it treated as a cost of this material.
- Sales tax
- Tax is added on top of the selling price and defaults to 0. Tax rules vary by state and by whether the sale is taxable, so confirm with your accountant.
- Margin limit
- Margin cannot reach 100%, so the margin option accepts at most 99.9%. A markup has no upper limit in the math.
This is an early planning estimate, not a quotation. Check quantities against your drawings, your specification and the manufacturer's data.
Questions about this calculator
What is the difference between markup and margin?
Markup is profit divided by cost. Margin is profit divided by selling price. For the same sale, margin is always the smaller percentage.
Is a 25% markup the same as a 25% margin?
No. A 25% markup on a cost of 100 sells for 125, and the 25 of profit is 20% of the price, so it is a 20% margin.
What markup gives a 30% margin?
Markup = margin / (1 - margin), so 0.30 / 0.70 = 42.86%. A cost of 7,000 then sells for 10,000.
Why can't margin be 100%?
A 100% margin would mean the whole selling price is profit and the cost is zero. The price formula divides by 1 minus the margin, which would be zero.
Take these numbers off the drawings
Estimateria reads the door, hardware and finish schedules out of your PDFs into a priced grid, so the quantities you check here start from the set instead of a retype.