What Markup Gives a 25 Percent Margin?
Markup, against cost
33.3%
To keep 25 percent of the price, add 33.3 percent to a $10,000 cost: $13,333.33.
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 number25 % or $
Price to charge$13,333.33
| Your cost | $10,000.00 |
|---|---|
| Price | $13,333.33 |
| Gross profit | $3,333.33 |
| Markup, against cost | 33.3% |
| Margin, against price | 25%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
A quarter of the price as gross profit needs a third added to cost. The gap is now over eight points, and anyone still adding twenty five to cost and calling it a twenty five percent margin is short by a quarter of the profit they planned for.
Twenty five percent gross is a reasonable working target for a residential contractor with a modest office and a couple of crews. It is enough to carry overhead through an ordinary year and leave a net that is worth the risk of being in business.
Set it as a floor rather than a goal. The jobs that go wrong are the ones priced at the target with nothing in reserve, and a contingency line in the estimate is cheaper than a change order conversation later.
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 25 percent margin?
33.3 percent. On a $10,000 cost that is a price of $13,333.33.
Is a 25 percent margin good for a contractor?
It is a reasonable working target for a residential contractor with a small office and a couple of crews, enough to carry overhead and leave a real net.
Should I add a contingency on top?
Yes, as a named line rather than as padding inside the margin. Jobs priced exactly at target with nothing in reserve are the ones that end up in change order disputes.
The markup vs margin calculator takes any dimensions you like and hands back the same list.