What Markup Gives an 80 Percent Margin?
Markup, against cost
400%
To keep 80 percent of the price, add 400 percent to a $10,000 cost: $50,000.
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 number80 % or $
Price to charge$50,000.00
| Your cost | $10,000.00 |
|---|---|
| Price | $50,000.00 |
| Gross profit | $40,000.00 |
| Markup, against cost | 400% |
| Margin, against price | 80%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
Eighty percent margin means charging five times cost, a 400 percent markup, and it is the right place to say that the highest percentage is not automatically the best work.
Margin is a ratio and a business is paid in dollars. A job at this margin worth $50,000 carries $40,000 of gross profit, which sounds unanswerable until you ask how long it occupies the crew. Forty days on site makes it $1,000 of gross profit a day. A plain job at a 25 percent margin, priced at $13,333.33 with $3,333.33 of gross profit, finished in three days, earns $1,111 a day. The modest job wins, and every margin table in the world hides that.
So rank last year's work twice: once by margin and once by gross profit per day on site. The two lists will not agree, and the disagreement is the most useful page of management information a small contractor can produce. It says which work to chase, which work to price higher until it either pays properly or goes away, and where the calendar is actually being spent.
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 an 80 percent margin?
400 percent. On a $10,000 cost that is a $50,000 price and $40,000 of gross profit.
Is the highest margin job always the best job?
No. A $50,000 job at 80 percent margin taking forty days earns $1,000 a day of gross profit. A $13,333.33 job at 25 percent margin finished in three days earns $1,111 a day.
What should I measure instead of margin alone?
Gross profit per day on site, alongside margin. Ranking last year's jobs both ways shows which work to chase and which to price higher until it pays properly.
The markup vs margin calculator takes any dimensions you like and hands back the same list.