What Margin Is a 30 Percent Markup?
Margin, against price
23.1%
Thirty percent added to a $10,000 cost is a $13,000 price, and $3,000 out of $13,000 is 23.1 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 number30 % or $
Price to charge$13,000.00
| Your cost | $10,000.00 |
|---|---|
| Price | $13,000.00 |
| Gross profit | $3,000.00 |
| Markup, against cost | 30% |
| Margin, against price | 23.1%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
Thirty percent markup gives a 23.1 percent margin, and the gap between the two numbers is now nearly seven points. That widening gap is the whole reason this conversion matters more at higher percentages, not less.
Twenty three percent gross is a workable number for a small residential contractor with lean overhead, and a thin one for anyone carrying an office, a service manager or a fleet. What it needs to be is a function of your own overhead, which is a figure you can calculate rather than guess.
Note that markup applied to a cost that already includes your labor burden is different from markup applied to bare wages. Burden, which is payroll taxes, comp insurance, liability and benefits, belongs in the cost side before the markup, not after it.
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 30 percent markup?
23.1 percent. On a $10,000 cost, a $13,000 price and $3,000 of gross profit.
Is 30 percent markup good for a contractor?
It depends entirely on your overhead rate. Twenty three percent gross is comfortable for a lean operator and thin for one carrying an office and a fleet.
Should labor burden be inside the cost?
Yes. Payroll taxes, comp, liability and benefits belong in cost before markup is applied, or the markup is silently funding them instead of producing profit.
The markup vs margin calculator takes any dimensions you like and hands back the same list.