How do you calculate margin?

Margin is the price minus the costs, divided by the price. With costs of 10,000 and a price of 12,500, the margin is 2,500, or 20 percent.

What is the difference between markup and margin?

Markup is calculated on costs and margin on the price. The same amount is therefore always a lower percentage as margin than as markup: a 25 percent markup gives a 20 percent margin.

How do you price a job with a target margin?

Divide the costs by one minus the target margin. For a 25 percent margin, divide by 0.75: costs of 10,000 give a price of 13,333.

← Calculators and templates

Margin calculator and markup calculator for builders

This margin calculator works out a job’s price from its costs. Choose whether you price with a markup or a target margin, then enter the percentage. It shows the price, the margin, the markup and the amount left over for overheads and profit. Figures are before VAT.

Markup and margin calculator

Costs of the job

Price with

MarkupTarget margin

Percentage (%)

Price: –
Margin: –
Markup: –
Left over for overheads and profit: –

Figures excluding VAT.

What formula does the margin calculator use?

Margin is always calculated on the price and markup on the costs. That is why a 25 percent markup gives only a 20 percent margin.

What you calculate	Formula
Price with a markup	costs × (1 + markup)
Price with a target margin	costs ÷ (1 − margin)
Margin	(price − costs) ÷ price
Markup	(price − costs) ÷ costs

Which costs go into the calculator?

Enter the job’s direct costs: materials with waste, labour, subcontractors, equipment and other site costs. The quantities behind them come from your material takeoff.

Overheads such as the office, vehicles, insurance and the time spent on estimating are paid out of the margin. Once you know what share of turnover your overheads take, you know the lowest margin a job can carry. The formulas, a conversion table and the common mistakes are in the guide to markup vs margin.

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Questions and answers

How do you calculate margin?: Margin is the price minus the costs, divided by the price. With costs of 10,000 and a price of 12,500, the margin is 2,500, or 20 percent.
What is the difference between markup and margin?: Markup is calculated on costs and margin on the price. The same amount is therefore always a lower percentage as margin than as markup: a 25 percent markup gives a 20 percent margin.
How do you price a job with a target margin?: Divide the costs by one minus the target margin. For a 25 percent margin, divide by 0.75: costs of 10,000 give a price of 13,333.