What Markup Gives a 10 Percent Margin?
Markup, against cost
11.1%
To keep 10 percent of the price, add 11.1 percent to a $10,000 cost: $11,111.11.
How that number is worked out
These are the figures this page was built with and every line the calculator produces from them. Change anything above and all of it moves.
- Your cost for the job10000 $
- I want to setMargin percent
- That number10 % or $
Price to charge$11,111.11
| Your cost | $10,000.00 |
|---|---|
| Price | $11,111.11 |
| Gross profit | $1,111.11 |
| Markup, against cost | 11.1% |
| Margin, against price | 10%this is the one your accountant means |
| If you want this margin | Mark up cost by | On $10,000 cost, charge |
|---|---|---|
| 10% | 11.1% | $11,111.11 |
| 15% | 17.6% | $11,764.71 |
| 20% | 25% | $12,500.00 |
| 25% | 33.3% | $13,333.33 |
| 30% | 42.9% | $14,285.71 |
| 35% | 53.8% | $15,384.62 |
| 40% | 66.7% | $16,666.67 |
| 50% | 100% | $20,000.00 |
Margin compared
Going the other way, the required markup climbs much faster than the margin does.
| Margin | Price to charge | Markup, against cost |
|---|---|---|
| 10% margin | $11,111.11 | 11.1% |
| 20% margin | $12,500.00 | 25% |
| 30% margin | $14,285.71 | 42.9% |
| 40% margin | $16,666.67 | 66.7% |
| 50% margin | $20,000.00 | 100% |
What else matters here
Going this direction is the one that actually matters when you are pricing. You decide what margin the business needs, and then you work out what to add to cost to get it. For ten percent, you add 11.1.
At low percentages the two numbers are close, which is exactly why the habit of treating them as the same survives. It stops being harmless around twenty percent and becomes expensive above thirty.
Ten percent margin is thin for any business that carries insurance and a vehicle. Before accepting it on a job, run your actual overhead as a percentage of revenue and check whether ten percent covers it at all.
What this calculator assumes
- Markup is measured against your cost. Margin is measured against the price. They are never the same number and confusing them is the most expensive arithmetic mistake in the trades.
- A 50 percent markup is a 33.3 percent margin. To actually keep 50 percent of the price you have to mark up by 100 percent.
Questions people ask
What markup gives a 10 percent margin?
11.1 percent. On a $10,000 cost that is a price of $11,111.11.
Why is the markup higher than the margin?
Because the markup is measured against the smaller number. Adding a percentage to cost always produces a smaller percentage of the resulting price.
Is a 10 percent margin sustainable?
Only with very low overhead. Gross margin has to pay for everything that is not job cost before any of it is profit.
The markup vs margin calculator takes any dimensions you like and hands back the same list.