What Margin Is a 25 Percent Markup?
Margin, against price
20%
Twenty five percent added to a $10,000 cost is a $12,500 price, and $2,500 out of $12,500 is exactly 20 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 number25 % or $
Price to charge$12,500.00
| Your cost | $10,000.00 |
|---|---|
| Price | $12,500.00 |
| Gross profit | $2,500.00 |
| Markup, against cost | 25% |
| Margin, against price | 20%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
This is the one clean conversion in the whole set: a 25 percent markup is exactly a 20 percent margin, no rounding. It is worth memorizing because it is the pair contractors most often need and most often get backwards.
So when a general contractor, an insurance adjuster or a client says they work to a twenty percent margin, the number you add to your cost is twenty five percent. Adding twenty gets you 16.7 and a conversation later about why the job did not make what it was supposed to.
Both figures describe exactly the same $2,500. Nothing about the job changed; only the denominator did. That is the entire subject, and it is why one of the two numbers has to be named in writing whenever a percentage is agreed.
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 25 percent markup?
Exactly 20 percent. It is the cleanest conversion in the set and the one worth memorizing.
What price is a 25 percent markup on $10,000?
$12,500, with $2,500 of gross profit, which is exactly 20 percent of the price.
Which number should go in a contract?
Whichever one you mean, named explicitly as markup on cost or margin on price. A bare percentage in a contract is the source of most of these disputes.
The markup vs margin calculator takes any dimensions you like and hands back the same list.