Stop confusing markup and margin - see the real difference instantly
Free tool by ThePocketBoss - enter your cost and markup percentage to see the actual profit margin. Plus a conversion table you can reference anytime.
Total cost of the job (labor + materials + overhead)
Percentage added on top of your costs
A contractor marks up a $10,000 job by 20% and charges $12,000. They think they're making a 20% profit margin. But the actual margin is only 16.7%. Over a year of jobs, that confusion can cost tens of thousands of dollars in lost profit.
Use markup for pricing - it's easier to apply to costs. Use margin to evaluate profitability - it tells you what percentage of revenue you're actually keeping. Just don't confuse the two when talking to your accountant or reviewing your P&L.
ThePocketBoss calculates both markup and margin on every estimate and invoice automatically. You always know the real numbers, so pricing confusion never costs you money.
No. A 50% markup results in a 33.3% margin. Markup is calculated on cost, margin is calculated on the selling price. They are always different numbers.
It varies by trade, but most contractors use 25-100% markup depending on the job type. Specialty work commands higher markup. Use this calculator to see what margin that actually gives you.
Divide the margin percentage by (100 minus the margin percentage), then multiply by 100. For example: 25% margin = 25 / 75 * 100 = 33.3% markup. Or just use the converter above.
Confusing markup with margin means you're making less profit than you think. If you aim for a 30% margin but apply a 30% markup, you're actually getting a 23% margin - leaving 7% on the table on every single job.
ThePocketBoss shows your real markup and margin on every estimate and invoice - no math required.
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