What Margin Is a 65 Percent Markup?
Margin, against price
39.4%
Sixty five percent added to a $10,000 cost is a $16,500 price, and $6,500 out of $16,500 is 39.4 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 number65 % or $
Price to charge$16,500.00
| Your cost | $10,000.00 |
|---|---|
| Price | $16,500.00 |
| Gross profit | $6,500.00 |
| Markup, against cost | 65% |
| Margin, against price | 39.4%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
Sixty five percent markup is a 39.4 percent margin on the job. It is not a 39.4 percent margin on the business, and the difference between those two sentences is where a lot of apparently well priced contractors quietly go broke.
The job margin is measured on work that was sold, estimated correctly, built once and paid for. The business has to absorb everything around that: the estimates that were never accepted, the callbacks under warranty, the day a crew sat waiting on an inspection, the material that was ordered wrong, the customer who paid sixty days late, and the one who did not pay at all.
None of those appear in a job cost sheet, and all of them are paid for out of margin. That is why the gap between what the jobs make and what the year makes is usually large and usually a surprise. The one habit that closes it is costing jobs after they are finished rather than only before they are sold, because the difference between the two is the real number.
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 65 percent markup?
39.4 percent. On a $10,000 cost that is a $16,500 price and $6,500 of gross profit.
Why is my company margin lower than my job margin?
Because unsold estimates, warranty callbacks, waiting on inspections, wrong material, late payment and bad debt never appear on a job cost sheet, and all of them are paid for out of margin.
How do I find the real number?
Cost jobs after they are finished, not only before they are sold. The gap between the estimated cost and the actual cost is the figure that explains the year.
The markup vs margin calculator takes any dimensions you like and hands back the same list.