RenovationRouteFree tool · Pricing math
Margin vs markup calculator
A 25% markup is a 20% margin, not 25%. Enter your cost and any one of markup, margin, or sell price, and the rest fills in.
Enter two values, like a cost of 100,000 and a margin of 20. The sell price, profit, markup, and margin show up here.
Sell price
Profit
Markup
Margin
Quick reference
Markup to margin, and back
Margin is always smaller than the markup that produced it. Enter a cost above and the last column shows the sell price on your job.
| Markup | Margin | Price on your cost |
|---|---|---|
| 10% | 9.09% | - |
| 15% | 13.04% | - |
| 20% | 16.67% | - |
| 25% | 20% | - |
| 30% | 23.08% | - |
| 35% | 25.93% | - |
| 40% | 28.57% | - |
| 50% | 33.33% | - |
| 100% | 50% | - |
| Margin | Markup needed | Price on your cost |
|---|---|---|
| 10% | 11.11% | - |
| 15% | 17.65% | - |
| 20% | 25% | - |
| 25% | 33.33% | - |
| 30% | 42.86% | - |
| 35% | 53.85% | - |
| 40% | 66.67% | - |
| 50% | 100% | - |
Percentages rounded to two decimals.
The math
The formulas this calculator uses
Markup is profit divided by cost. Margin is profit divided by sell price. Same dollars, different base.
- Profit = Price − Cost
- Markup = (Price − Cost) ÷ Cost
- Margin = (Price − Cost) ÷ Price
- Price = Cost × (1 + Markup)
- Price = Cost ÷ (1 − Margin)
- Margin = Markup ÷ (1 + Markup)
- Markup = Margin ÷ (1 − Margin)
Percentages go in as decimals: 20% is 0.20.
Where bids go wrong
You want a 20% margin on a $100,000 job, so you add 20%. That prices it at $120,000 with $20,000 of profit, which is a 16.67% margin.
To actually keep 20%, divide instead: $100,000 ÷ (1 − 0.20) = $125,000. That is $25,000 of profit, a 25% markup. The difference is $5,000 on one job.
What the calculator will not accept
Cost and sell price have to be more than $0. Markup and margin cannot be negative. Margin has to be under 100%, because a 100% margin means the job cost nothing. Markup and margin alone cannot set a price, since they describe the same ratio, so one of the two values has to be a dollar amount. If you enter a sell price below cost, you get the loss.
Pricing federal work
RenovationRoute pulls federal construction bids from SAM.gov by NAICS code. The bid list is free. $20 a month adds a brief on each bid plus email and SMS alerts.
See federal construction bids