What Margin Is a 22 Percent Markup?
Margin, against price
18%
Twenty two percent added to a $10,000 cost is a $12,200 price, and $2,200 out of $12,200 is 18 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 number22 % or $
Price to charge$12,200.00
| Your cost | $10,000.00 |
|---|---|
| Price | $12,200.00 |
| Gross profit | $2,200.00 |
| 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 |
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
Twenty two percent markup is an 18 percent margin, and a figure in this range is common on subcontracted work, where the contractor is coordinating rather than performing.
A lower markup on subbed work than on self performed work is normal and defensible. You are not carrying the payroll, the comp insurance, the tools or the productivity risk, and the capital tied up is smaller. What is not defensible is zero, because you are still carrying the schedule, the coordination, the punch list, the warranty the customer will call you about, and the payment risk if the sub is not paid on time and files a lien on your customer's house.
The trap is the blended figure. On a job that is half subbed and half self performed, one markup across the whole thing hides which half is earning. Price the two pieces at their own percentages, then report the total, and you keep the ability to see whether the coordination or the work is paying for the business.
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 margin is a 22 percent markup?
18 percent. On a $10,000 cost that is a $12,200 price and $2,200 of gross profit.
Should subcontracted work carry less markup?
Usually yes, because you are not carrying payroll, comp, tools or productivity risk. It should never be zero, since you still carry the schedule, the coordination, the warranty and the payment risk.
Can I use one markup across a whole job?
You can, but a blended figure hides which part of the job is earning. Marking subbed and self performed work separately shows whether the coordination or the work is paying for the business.
The markup vs margin calculator takes any dimensions you like and hands back the same list.