What Markup Gives a 45 Percent Margin?
Markup, against cost
81.8%
To keep 45 percent of the price, add 81.8 percent to a $10,000 cost: $18,181.82.
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 number45 % or $
Price to charge$18,181.82
| Your cost | $10,000.00 |
|---|---|
| Price | $18,181.82 |
| Gross profit | $8,181.82 |
| Markup, against cost | 81.8% |
| Margin, against price | 45%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
Forty five percent margin needs 81.8 percent added to cost. At this level there is usually a reason the customer chose you rather than the cheapest quote, and that reason cost money to create.
Getting a job costs something before a tool leaves the truck: the advertising or the truck wrap or the yard signs, the time spent on the phone, the drive out to look, the hours spent writing an estimate that may not be accepted, and whatever it takes to stay visible between jobs. If landing one job costs $600 all in, that is 7.3 percent of the $8,181.82 of gross profit here, and it is a real cost that appears nowhere in the job cost sheet.
Work it out once for your own business: total last year's marketing, estimating and sales time, divide by the number of jobs sold, and you have a cost per job. Then the useful comparison is the one nobody makes, which is that a referral or a repeat customer costs almost nothing to win. That is the actual return on doing the job properly and turning up when you said you would, and it is worth more than any advertising channel.
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 45 percent margin?
81.8 percent. On a $10,000 cost that is a price of $18,181.82 and $8,181.82 of gross profit.
Is customer acquisition a job cost?
It is a real cost that never appears on a job cost sheet. At $600 to land a job it is 7.3 percent of the gross profit on this one.
How do I work out my cost per job?
Add last year's marketing spend, estimating time and sales time, then divide by the number of jobs sold. Compare that to a referral, which costs almost nothing.
The markup vs margin calculator takes any dimensions you like and hands back the same list.