Enter your job costs and target margin to get the right bid price. Understand the difference between markup and margin so you stop leaving money on the table.
Contractor markup is the percentage added to total job costs (labor, materials, overhead) to arrive at the bid price. Most trade contractors use a 20–35% markup, which produces a 17–26% profit margin on the final price. Unlike margin — calculated on price — markup is always calculated from cost. Confusing the two is one of the most common contractor pricing mistakes, and it leads to systematic underpricing.
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This calculator is for informational purposes only. Results are estimates based on the inputs you provide. Consult a qualified financial professional before making business decisions.
Markup is calculated on cost (profit / cost x 100). Margin is calculated on revenue (profit / revenue x 100). A 25% markup produces a 20% margin. Contractors often confuse the two, which leads to underpricing jobs.
Most general contractors target 15-30% gross margin, which corresponds to a 18-43% markup on costs. Specialty trades like electrical and plumbing often achieve 25-35% margins. Use this calculator to find your specific target based on overhead and desired profit.
Divide your total job cost by (1 - desired margin). For a $10,000 job with a 25% margin target: $10,000 / 0.75 = $13,333 bid price. Alternatively, multiply cost by (1 + markup percentage): $10,000 x 1.333 = $13,333.
Yes. Overhead - insurance, tools, vehicle, admin time, licensing - must be recovered through markup or it comes out of profit. A common approach is to calculate your cost of doing business per hour or per project and include it before applying your profit margin.
Underpriced jobs cover materials and direct labor but not overhead or profit. Over time this leads to negative cash flow even when you appear busy. The contractor markup calculator shows you the minimum price needed to cover all costs and still hit your profit target.
Yes, and many contractors do. A common approach is 10-15% on materials (lower because costs are transparent) and 30-40% on labor (higher because your time and expertise are the differentiator). This calculator uses a blended average.
The markup calculator shows gross profit, not net after tax. If you're structured as an LLC or S-Corp, your tax rate on profits typically ranges 15-30%. Factor this into your profit target: if you want $50K after tax at a 25% rate, you need $67K gross profit.