Markup and Margin Calculator
Enter a cost and a markup, or a target margin, and see sell price, profit and the GST-inclusive price. Markup and margin are not the same number.
A markup calculator turns a cost price into a sell price. Enter your cost and a markup percentage, or a target margin, and it returns the sell price, profit, and both the markup and margin so you never confuse the two. Markup is profit over cost; margin is profit over the sell price. A 50% markup is only a 33.3% margin.
Markup vs margin, in one sentence each
Markup is how much you add on top of what something cost you, as a percentage of that cost. Margin is how much of the final sell price is profit, as a percentage of the sell price. Same dollars of profit, different denominator, and the gap between the two numbers grows as you price up.
Markup to margin conversion table
The markup you apply and the margin you keep are never the same number. This is the conversion:
| Markup | Margin you actually keep |
|---|---|
| 10% | 9.1% |
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 30% | 23.1% |
| 40% | 28.6% |
| 50% | 33.3% |
| 60% | 37.5% |
| 75% | 42.9% |
| 100% | 50.0% |
Why tradies underprice with markup thinking
The trap is treating markup and margin as the same figure. If you want to keep 40% of every job as margin but you only add a 40% markup, you actually keep 28.6%: you are almost a third short on profit before you have paid a bill. Decide the margin you need first, then read the markup off the table above, or let the calculator do it.
Set your charge-out rate next
Markup handles materials and sundries. Your labour needs a charge-out rate that already covers wages, on-costs, overheads and profit.
Frequently asked questions
What is the difference between markup and margin?
Markup is your profit measured against the cost price; margin is the same profit measured against the sell price. A $100 cost sold for $150 is a 50% markup but a 33.3% margin. They describe the same dollar of profit from two different angles, which is why they are easy to mix up.
What markup should a tradie use?
There is no single correct number: it depends on your overheads, risk and how competitive the work is. The important thing is to price from a target margin that covers your real costs and leaves profit, then convert that margin to the markup you apply on the tools. Use the calculator above to see the markup a given margin needs.
Does a 50% markup equal a 50% margin?
No. A 50% markup produces a 33.3% margin. To actually keep a 50% margin you need a 100% markup (double the cost). Charging a 50% markup when you meant a 50% margin is one of the most common ways trades quietly underprice.
Do I apply markup to labour or materials?
To both, but usually at different rates. Materials often carry a smaller markup while labour carries your full charge-out rate, which already bakes in overheads and profit. Work your labour rate out with the charge-out rate calculator, then use markup on materials and sundries.