Calculators

Markup vs margin calculator

A 30% markup is only a 23% margin. Put in your numbers and see what you really keep on a job.

I want to

You know your cost and the markup you add. See the margin you actually keep.

Materials, labour, or the whole job.

Markup 30% Profit measured against cost
Margin 23.1% Profit measured against price

Adding 30% to your cost gives you a 23.1% margin. You keep $23.08 of every $100 you charge.

Sell price ex GST
$1,300.00
Sell price inc GST
$1,430.00
Profit on the job
$300.00

Meant a 30% margin? Charge $1,428.57 instead. That's $128.57 more on this job.

This is gross margin: what's left before running costs like the ute, insurance and phone.

Common markups and the margin they really give you

Tap a markup to load it into the calculator.

Markup
Margin 9.1% 13.0% 16.7% 20% 23.1% 28.6% 33.3% 50%
Show the maths
Profit
Sell price minus cost
Markup
Profit ÷ cost. $300 ÷ $1,000 = 30%
Margin
Profit ÷ sell price. $300 ÷ $1,300 = 23.1%
Markup for a margin
Margin ÷ (100 - margin). For a 30% margin: 30 ÷ 70 = 42.9%

Same dollars, different yardstick. Markup compares your profit to what the job cost you. Margin compares it to what the customer paid, which is always the bigger number, so margin always comes out lower.

Work it out before GST. The 10% GST is collected for the ATO, so it isn't part of your margin.

Example: a $2,000 job

Your cost on a job is $2,000 ex GST, covering materials, subbies and labour. You add a 30% markup, so you quote $2,600 ex GST, or $2,860 inc GST. Your profit is $600.

That $600 is 30% of your cost, which is your markup. It is only 23.1% of the price, which is your margin.

If you were aiming to keep 30% of the price, you needed to quote $2,857 ex GST, which is a 42.9% markup. Mixing the two up cost $257 on one job.

Read the full guide on how to price a job for margin.

Questions tradies ask

What's the difference between markup and margin?

They measure the same profit against different numbers. Markup is your profit as a percentage of your cost. Margin is your profit as a percentage of your sell price. On a job that costs $1,000 and sells for $1,300, the $300 profit is a 30% markup but only a 23.1% margin.

Is a 30% markup the same as a 30% margin?

No. A 30% markup gives you a 23.1% margin. To keep 30% of the sell price, you need to add 42.9% to your cost. The quick formula is: markup needed = margin ÷ (100 - margin). For a 30% margin, that's 30 ÷ 70 = 42.9%.

Do I work out markup and margin before or after GST?

Before. Work out your price ex GST, then add the 10% GST on top. GST is collected for the ATO, so it isn't part of your profit or your margin. If you're registered for GST, use your supplier costs ex GST too, since you claim that GST back.

How much should I mark up materials?

There's no set rule, and it varies by trade and by job. Your markup pays for the time spent sourcing, picking up and handling materials, plus returns and standing behind the parts if they fail. Many tradies use a tiered markup: a higher percentage on small, cheap parts that take as much running around as big ones, and a lower percentage on big-ticket items customers can easily price check. If a customer supplies their own materials, you lose that margin, so it's common to charge more for labour and limit the warranty to your workmanship.

What's a good profit margin for a tradie?

It depends on your running costs, so work it out backwards. Your gross margin has to cover overheads like the ute, insurance, phone and software, plus the profit you want to keep. If overheads take 25% of your turnover and you want 10% net profit, you need about a 35% gross margin, which is a 53.8% markup on cost. Count a fair wage for yourself as a cost, or the numbers will look better than they are.

How much does a 10% discount really cost me?

Far more than 10% of your profit. Take a job that costs you $1,000 and sells for $1,300. Knock 10% off and you charge $1,170, so your profit falls from $300 to $170. That's a 43% cut in profit, and your margin drops from 23.1% to 14.5%. Every dollar of discount comes straight out of your profit. Before you discount to win a job, try following up the quote first.

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Related reading: How to follow up a quote