A markup calculator answers the question every estimate ends on: what percentage goes on top of the job's cost so the price covers the overhead the job does not see and still leaves a profit. Markup is the percentage added to cost; margin is the share of the price that is profit, and a contractor who quotes a thirty percent markup expecting a thirty percent margin has priced the year at a loss. The free estimate template on this site applies the overhead and the markup you enter to the material, waste and labor lines and prints the total, so the calculation is done once per job rather than argued at the kitchen table.
Markup and margin are two different percentages
Markup is measured against cost: a job that costs the company one thousand dollars in materials and labor, marked up by half, is priced at one thousand five hundred. Margin is measured against the price: the same job has a margin of one third, because five hundred is a third of fifteen hundred. The two numbers only meet at zero. A contractor who reads a margin target from a book and applies it as a markup leaves money on every job, and the reverse over-prices the work until the phone stops ringing. The calculator prints both so the estimate is read the right way round.
Recover the overhead before you count the profit
Overhead is every dollar the company spends that no single job asks for: the truck, the insurance, the office, the phone, the owner's time selling. The markup has to carry it. Divide last year's overhead by last year's direct job cost and the result is the overhead percentage the markup must at least reach before any profit exists. A one-truck company with high fixed costs needs a higher markup than a crew with more jobs to spread the same overhead across, which is why a competitor's number is not yours.
Put the number on the estimate, not in your head
The template on this site takes the takeoff's material cost, the waste allowance, the labor hours at a loaded rate, subcontractors, the overhead percentage and the markup, and prints the material, labor, overhead, profit and total lines the customer sees. The markup is a line the company can defend, because the cost underneath it is written down. Pro keeps every estimate with the markup it went out at, so the jobs that won and the jobs that lost can be read against the number that priced them.
Questions people ask about markup calculator
What markup should a trade contractor use?
The one that covers the company's own overhead percentage and adds the profit the owner wants; it is calculated from last year's books, not copied from a forum. Two contractors on the same street can need different numbers.
How do I convert a margin target into a markup?
Divide the margin by one minus the margin. A margin target of one quarter becomes a markup of one third on cost. The calculator does the conversion in both directions.
Is markup applied to labor as well as materials?
Usually to the whole direct cost, materials and labor together, after the loaded labor rate has already carried the crew's burden. Some trades mark materials and labor at different rates; the template lets you enter the overall percentage that results.