What Margin Is a 55 Percent Markup?
Margin, against price
35.5%
Fifty five percent added to a $10,000 cost is a $15,500 price, and $5,500 out of $15,500 is 35.5 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 number55 % or $
Price to charge$15,500.00
| Your cost | $10,000.00 |
|---|---|
| Price | $15,500.00 |
| Gross profit | $5,500.00 |
| Markup, against cost | 55% |
| Margin, against price | 35.5%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
Fifty five percent markup is a 35.5 percent margin, above what most contractors price base contract work at, and exactly where change order work belongs.
A change order is not a small version of the original job. It arrives after the schedule is set, it interrupts work that was already sequenced, it often needs a separate trip or a separate delivery, and it carries its own estimating, paperwork and approval time for an amount that may be a fiftieth of the contract. All of that fixed effort is spread across a small number, which is precisely the situation a higher percentage exists for.
The part that matters more than the percentage is the process. Price it, write it, get it signed, and only then build it. Verbal change orders are the single most common reason a profitable job ends in an argument, and no markup is high enough to cover work the customer does not believe they agreed to.
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 55 percent markup?
35.5 percent. On a $10,000 cost that is a $15,500 price and $5,500 of gross profit.
Should change orders carry a higher markup?
Yes. A change order interrupts a set schedule, often needs its own trip and delivery, and carries full estimating and approval effort for a small amount, so the fixed work is spread across a small number.
Do change orders need to be in writing?
Always, and signed before the work is built. Verbal change orders are the most common reason a profitable job ends in a dispute, and no markup covers work the customer denies agreeing to.
The markup vs margin calculator takes any dimensions you like and hands back the same list.