What Margin Is a 15 Percent Markup?
Margin, against price
13%
Fifteen percent added to a $10,000 cost is an $11,500 price, and $1,500 out of $11,500 is 13 percent.
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 setMarkup percent
- That number15 % or $
Price to charge$11,500.00
| Your cost | $10,000.00 |
|---|---|
| Price | $11,500.00 |
| Gross profit | $1,500.00 |
| Markup, against cost | 15% |
| Margin, against price | 13%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 |
Markup compared
The gap between markup and margin widens as the number grows. Same cost, five markups.
| Markup | Price to charge | Margin, against price |
|---|---|---|
| 10% markup | $11,000.00 | 9.1% |
| 20% markup | $12,000.00 | 16.7% |
| 30% markup | $13,000.00 | 23.1% |
| 40% markup | $14,000.00 | 28.6% |
| 50% markup | $15,000.00 | 33.3% |
What else matters here
Fifteen percent is the number that appears in a lot of cost plus contracts, usually written as fifteen percent overhead and profit. Read those words carefully: the fifteen percent is meant to cover both, so the actual profit left after overhead is considerably less than fifteen.
As a margin it is thirteen percent. If your overhead runs at ten percent of revenue, which is modest for a small contractor, the profit on that job is three percent. One slow month erases it.
The useful move is to know your own overhead rate as a percentage of revenue before agreeing to a cost plus number, rather than after. The hourly rate calculator and the overhead and profit calculator on this site both work that out from figures you already have.
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
Is 15 percent markup the same as 15 percent margin?
No. A 15 percent markup is a 13 percent margin.
What price is a 15 percent markup on $10,000?
$11,500, with $1,500 of gross profit, which is 13 percent of the price.
Does 15 percent overhead and profit mean 15 percent profit?
No. The phrase means the fifteen percent is meant to cover overhead first, with profit being whatever is left.
The markup vs margin calculator takes any dimensions you like and hands back the same list.