What Markup Gives an 18 Percent Margin?
Markup, against cost
22%
To keep 18 percent of the price, add 22 percent to a $10,000 cost: $12,195.12.
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 number18 % or $
Price to charge$12,195.12
| Your cost | $10,000.00 |
|---|---|
| Price | $12,195.12 |
| Gross profit | $2,195.12 |
| Markup, against cost | 22% |
| Margin, against price | 18%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
Eighteen percent margin needs 22 percent on cost. Whether eighteen is a good number or a bad one is not answerable without knowing what trade you are in, and that is the point of this page.
Margins are not comparable across trades because the shape of the cost is not comparable. Work that is mostly material passed through at a modest markup, like a supply and install of somebody else's product, runs at a lower margin and a higher dollar volume. Work that is mostly labor and diagnosis, with a few dollars of parts, runs at a much higher margin on a much smaller ticket. Neither is better run than the other.
So a percentage taken from a magazine, a forum post or a friend in a different trade tells you almost nothing. The only useful comparison is your own trade, your own market and your own last twelve months, and the only useful target is the one that clears your own overhead with something left. That number comes out of your own books, which is exactly what the overhead and profit calculator on this site is for.
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 an 18 percent margin?
22 percent. On a $10,000 cost that is a price of $12,195.12 and $2,195.12 of gross profit.
Is an 18 percent margin good?
It depends entirely on the trade. Material heavy supply and install work runs thin on large tickets, while labor and diagnosis work runs much fatter on small ones, and neither is better managed than the other.
What margin should my trade run at?
The one that clears your own overhead with something left over. A figure from another trade or another market tells you almost nothing about your own business.
The markup vs margin calculator takes any dimensions you like and hands back the same list.