What Margin Is a 33 Percent Markup?
Margin, against price
24.8%
Thirty three percent added to a $10,000 cost is a $13,300 price, and $3,300 out of $13,300 is 24.8 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 number33 % or $
Price to charge$13,300.00
| Your cost | $10,000.00 |
|---|---|
| Price | $13,300.00 |
| Gross profit | $3,300.00 |
| Markup, against cost | 33% |
| Margin, against price | 24.8%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 single most common version of the mistake. A contractor says they add a third, and believes that means a third of the job is profit. A 33 percent markup is a 24.8 percent margin. A quarter, not a third.
The sentence to keep is that adding a third leaves you a quarter, and to actually keep a third you have to add a half. Fifty percent markup is a 33.3 percent margin, which is the pair the fifty percent page on this site covers.
The size of the error is worth seeing in dollars rather than points. On $300,000 of annual cost, a business that believes it is running at a 33 percent margin thinks it is producing about $148,000 of gross profit. Marking up by a third produces $99,000. That $49,000 gap is not a small variance, it is most small contractors' entire net profit for the year, and it comes from one word being used for two different fractions.
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 33 percent markup?
24.8 percent. Adding a third to your cost leaves you a quarter of the price, not a third.
What markup do I need to keep a third?
Fifty percent. A 50 percent markup is a 33.3 percent margin, so adding a half is what keeps a third.
How much does this mistake cost?
On $300,000 of annual cost, believing a third added is a third kept overstates gross profit by roughly $49,000 a year, which is more than many small contractors net.
The markup vs margin calculator takes any dimensions you like and hands back the same list.