Markup Calculator

How to use this markup calculator

Pick the mode that matches what you already know. All three work in dollars and percentages, and the result updates as you type.

1. Cost + markup: enter what the item costs you and the markup you want to add. You get the selling price, your profit and the gross margin.
2. Cost + price: enter your cost and what you charge (or plan to charge). You get the markup and margin you are actually making.
3. Target margin: enter the gross margin you want to keep. You get the markup that produces it, and the price if you also enter a cost.
4. Use Copy this line to paste the numbers into your job notes or a quote.

The cost can be anything you buy and resell to a client: lumber, paint, a replacement part, a rental, a printing order or a subcontractor’s bill.

How to calculate markup

Markup is the amount you add on top of your cost, written as a percentage of that cost. It answers one question: how much more than I paid should the client pay?

Worked example: materials on a repair job

You spend $400 on materials for a job and mark them up 25%.

• Selling price: $400 × 1.25 = $500
• Profit on the materials: $500 − $400 = $100
• Gross margin: $100 ÷ $500 = 20%

Going the other way works too. If a part costs you $180 and you charge $270, the markup is ($270 − $180) ÷ $180 = 50%, and the margin is $90 ÷ $270 = 33.33%.

Worked example: a subcontractor’s bill

An electrician bills you $1,200 for their part of your job, and you add 20% for finding, scheduling and standing behind them. The client pays $1,200 × 1.20 = $1,440. You keep $240, a 16.67% margin.

Markup vs margin

Markup and margin use the same dollar profit but divide it by different numbers. Markup divides by cost. Margin divides by price. Because price is always bigger than cost when you make a profit, the margin percentage is always the smaller of the two.

So a 25% markup is a 20% margin (0.25 ÷ 1.25), and a 50% margin needs a 100% markup (0.5 ÷ 0.5). Here is the conversion for common markups, with the price on the same $400 cost:

Use markup when you set a price from a cost. Use margin when you judge how profitable a job or your whole business is. If you start from a margin target, the profit margin calculator works out the price directly.

Typical markups for service businesses

There is no single right markup. It depends on your trade, the size of the job and your overhead. These are the ranges Housecall Pro publishes in its contractor pricing guides. The margin column is our conversion of each range, rounded to the nearest percent.

How much to mark up materials and subcontractors

Your markup on resold items pays for real work: researching options, ordering, picking up, storing, handling returns, replacing damaged stock and waiting for the client to pay you back. Start from those costs, not from what a competitor charges.

• Work back from the margin you need. If overhead takes 15% of revenue and you want 10% profit, you need a 25% margin on direct costs, which is a 33.33% markup, not 25%.
• Mark up small items more than large ones. Driving to the supply house for a $20 fitting costs you the same time as for a $500 fixture.
• Keep a separate rate for subcontractors. You’re carrying their risk: if their work fails, the client calls you.
• Recheck prices on long jobs. If supplier prices move between the quote and the purchase, your markup shrinks unless the quote says how you handle it.
• Stay consistent. Use the same markup for the same kind of item across clients, so your prices are easy to explain.

If you price whole jobs from cost (labor, materials, subcontractors and overhead), the service price calculator builds the full job price instead of one line.

Common markup mistakes

• Treating markup as margin. You add 20% to a $1,000 cost and expect to keep 20%. You keep $200 of $1,200, which is 16.67%. To keep a real 20% margin you need to charge $1,250, a 25% markup.
• Marking up the wrong cost. Use what you actually paid, including delivery fees and sales tax you can’t get back, not the list price.
• Forgetting card fees. If the client pays by card, a few percent of the price goes to the processor. A thin markup can disappear into fees.
• Dividing instead of multiplying. Cost ÷ (1 − 25%) gives a 25% margin price, not a 25% markup price. Pick the formula that matches the number you were given.
• Never revisiting it. A markup that worked when you were working alone may not cover a van, a helper and insurance.

How to show markup on an invoice

Most service businesses bill the marked-up price as the line rate and don’t print the markup. The client sees “Materials: $500”, not “$400 + 25%”. Whether to show your cost is a business choice; if your contract promises cost-plus billing, show the cost and the markup as separate lines.

1. List materials, parts or subcontracted work as their own line items, so the client can see what they paid for.
2. Use quantity × rate, with the rate already marked up. For example, 2 × $250 for an item that cost you $200 before a 25% markup.
3. Add any tax rate that applies, then send the invoice.

In Onigiri, line items are quantity × rate, with tax rates and discounts, and invoices go out by email, as a link or as a PDF. The free plan covers 3 invoices a month with unlimited clients. On PRO you can save a marked-up item as a template so the price is the same on every invoice. For a one-off, the free invoice generator makes a PDF without sign-up, and our guide to the itemized invoice shows how to lay out the lines.

Frequently asked questions