What Markup Gives a 60 Percent Margin?
Markup, against cost
150%
To keep 60 percent of the price, add 150 percent to a $10,000 cost: $25,000.
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 number60 % or $
Price to charge$25,000.00
| Your cost | $10,000.00 |
|---|---|
| Price | $25,000.00 |
| Gross profit | $15,000.00 |
| Markup, against cost | 150% |
| Margin, against price | 60%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
Sixty percent margin means multiplying cost by two and a half, a 150 percent markup. The most reliable place a small contractor finds margins like this is not a single job at all, it is a maintenance agreement.
The economics are different from the start. The sale has already been made, so there is no estimate to write and no bid to lose. The visit is scheduled when it suits you, which means it fills the week that would otherwise have been quiet. The equipment is familiar because you installed it or you saw it last spring, so the time on site is predictable in a way a first visit never is.
Then there is the part that matters more than the margin on the agreement itself. The customer who has an agreement calls you first when something breaks, and they call you rather than searching, which means the repair work arrives without an acquisition cost and without three competing quotes. A book of agreements is the closest thing a contracting business has to an asset, and it is worth building deliberately rather than as an afterthought.
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 60 percent margin?
150 percent. On a $10,000 cost that is a $25,000 price and $15,000 of gross profit.
Why do maintenance agreements carry high margins?
The sale is already made, the visit is scheduled when it suits you, it fills otherwise quiet weeks, and the equipment is familiar so the time on site is predictable.
What is a maintenance agreement really worth?
More than the margin on the visits. The customer calls you first when something breaks, so repair work arrives with no acquisition cost and no competing quotes.
The markup vs margin calculator takes any dimensions you like and hands back the same list.