Contractor Markup Calculator
Calculate your selling price from job cost and target markup in seconds. See exactly how markup and margin differ — a mistake that costs contractors thousands every year. Enter your cost and markup below for an instant quote price.
🔨 Contractor Markup Calculator
📐 How It Works
Markup is the percentage added on top of your cost price to arrive at the selling price. It is calculated on cost. Margin is the profit as a percentage of the selling price. These are different numbers — confusing them is one of the most common and costly mistakes contractors make. A 25% markup gives a 20% margin, not 25%.
📋 Worked Example
A plumber prices a job: materials $800, labour $1,200, total cost $2,000. At 25% markup: Selling price = $2,000 × 1.25 = $2,500. Profit = $500. Profit margin = $500 ÷ $2,500 = 20% — not 25%. Including 10% GST: Quote to client = $2,500 × 1.10 = $2,750.
❓ Frequently Asked Questions
Markup is calculated on cost: a 20% markup on $1,000 cost = $1,200 selling price. Margin is calculated on selling price: a 20% margin on $1,200 selling price = $240 profit. The same dollar profit = 20% markup but only 16.7% margin. Always clarify which one you mean when discussing profitability.
Most trade contractors mark up 15–30% depending on trade, overhead structure and market conditions. Specialist trades with high skill requirements or limited competition can achieve 30–50%. Subcontractors working for builders typically work on tighter margins of 10–20%.
In Australia, always quote to clients including GST (10%) unless the client is GST-registered and requests ex-GST pricing. Your markup should be calculated on your ex-GST cost. Add GST as the final step before presenting the quote.
Your markup must cover both direct job profit AND overhead recovery. Calculate your annual overhead costs (insurance, vehicle, tools, admin, marketing) and divide by your billable hours to get an overhead rate per hour. Add this to your labour cost before applying markup.