What Markup Gives a 75 Percent Margin?
Markup, against cost
300%
To keep 75 percent of the price, add 300 percent to a $10,000 cost: $40,000.
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 number75 % or $
Price to charge$40,000.00
| Your cost | $10,000.00 |
|---|---|
| Price | $40,000.00 |
| Gross profit | $30,000.00 |
| Markup, against cost | 300% |
| Margin, against price | 75%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
Seventy five percent margin means quadrupling the cost, a 300 percent markup. Businesses that operate up here have usually stopped pricing from cost altogether and moved to a flat rate book.
Flat rate pricing sets a fixed price for a named task, the same for every customer and every technician, worked out in advance from the time the task takes, the parts it needs and what it is worth to have it done today. The customer hears one number before the work starts instead of watching a meter run, the technician is not negotiating in a hallway, and the price does not fall because the job went smoothly or rise because it did not.
The cost calculation does not disappear, it moves. It becomes the check that every task in the book is above water, which is why a book needs reviewing when wages or parts move rather than once when it is written. A price book built on last year's labor cost and this year's parts prices will have a handful of tasks quietly losing money, and the only way to find them is to run the cost again.
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 75 percent margin?
300 percent. On a $10,000 cost that is a $40,000 price and $30,000 of gross profit.
What is flat rate pricing?
A fixed price per named task, the same for every customer, worked out in advance from the time, the parts and the value of having it done. The customer gets one number before the work starts.
Does flat rate pricing mean ignoring cost?
No, it moves the cost calculation. Cost becomes the check that every task in the book is still above water, which is why the book has to be rerun when wages or parts prices change.
The markup vs margin calculator takes any dimensions you like and hands back the same list.