Free tool
Markup Calculator for Contractors
Enter what a part, fixture, or piece of equipment costs you and the markup you charge to see your selling price and gross margin, then find the markup you'd need to hit the margin you want.
Your inputs
Works for a single part or the material total on a whole job. Example numbers are filled in.
Your results
Based on the cost and percentages you entered.
| Selling price at your markup | |
| Gross profit in dollars |
How markup and margin work
Markup and margin describe the same dollars from two directions. Markup is your profit as a percentage of what the item cost you, while gross margin is that same profit as a percentage of the price the customer pays. Because the price is always larger than the cost, the margin is always the smaller number, and the gap widens as the markup goes up.
Mixing the two up is expensive. A contractor who wants a 40% gross margin and marks everything up 40% ends up with a 28.6% margin, which is more than 11 points short on every job.
The two formulas
Profit is the selling price minus your cost in both formulas, and the only thing that changes is what you divide it by.
Markup to margin chart
| Markup | Gross margin |
|---|---|
| 25% | 20.0% |
| 33% | 24.8% |
| 43% | 30.1% |
| 50% | 33.3% |
| 67% | 40.1% |
| 100% | 50.0% |
| 150% | 60.0% |
- Small parts usually carry higher markups than equipment and fixtures, because the dollars per item are small and the cost of stocking and handling them is proportionally high.
- Plumbing contractors commonly mark up fixtures 30% to 60% and small parts 75% to 150% or more.
- HVAC contractors commonly mark up equipment 25% to 50% and parts 50% to 100% or more.
- The margin shown here covers materials only, so labor, overhead, and profit on the whole job still need their own math.
For typical ranges and how to set your own numbers, see our guides to plumbing material markup and HVAC material markup. To find what an hour of field labor costs you, use the Labor Burden Calculator.
This calculator is for estimating only and isn't tax, legal, or pricing advice. Results depend on the information you enter.
Want your books to show margin by job?
Prophet Accounting keeps the books for home service and construction contractors with job costing built in, so you can see whether the markup you quote is the margin you keep.
See how we work with contractors Call (772) 380-2871