Profit margin calculator
Enter what a job costs you and what you charge. The calculator shows your profit, your margin (profit as a share of the price) and your markup (profit as a share of the cost). Add a target margin to see the lowest price that hits it.
The calculator needs JavaScript. You can also do it by hand with the formulas below.
The formulas
- Profit = price − cost
- Margin = profit ÷ price
- Markup = profit ÷ cost
- Price for a target margin = cost ÷ (1 − target margin)
Example: a job costs you $600 and you charge $1,000. Profit is $400. Margin is 40% ($400 ÷ $1,000). Markup is 66.7% ($400 ÷ $600).
Margin vs markup
They use the same profit but divide by different things, which is why they’re easy to mix up. If you want a 40% margin, a 40% markup isn’t enough. On a $600 job, a 40% markup gives a $840 price and only a 28.6% margin. To get a 40% margin you need to charge $1,000.
What counts as cost
Count everything the job uses: materials, the hours you and your crew spend (at what you pay, including payroll costs), drive time, permits and card processing fees. If you only count materials, your margin will look better than it is.
What this doesn’t do
It doesn’t spread your overhead (rent, insurance, vehicles, software) across jobs, and it doesn’t handle tax. It’s the math on the numbers you enter, nothing more.
This is math on your inputs, not financial advice. Check with your accountant or attorney for your situation.