What Margin Is an 80 Percent Markup?
Margin, against price
44.4%
Eighty percent added to a $10,000 cost is an $18,000 price, and $8,000 out of $18,000 is 44.4 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 number80 % or $
Price to charge$18,000.00
| Your cost | $10,000.00 |
|---|---|
| Price | $18,000.00 |
| Gross profit | $8,000.00 |
| Markup, against cost | 80% |
| Margin, against price | 44.4%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
Eighty percent markup is a 44.4 percent margin. High percentages like this are common in trades that own equipment, and equipment is the cost most often left out of the cost column entirely.
A machine you already paid for feels free, and it is not. It has a purchase price spread over a working life, fuel, maintenance, tires or tracks, repairs, insurance, registration and a trailer to move it, and one day it has to be replaced at a price nobody expects. If a rented machine would have cost $400 a day, an owned one should go on the job at a rate in the same range, because the job is consuming it either way.
Charge equipment to the job as a rate for the hours or days used, put that rate in the cost column, and mark it up like any other cost. Leaving it out makes the job look more profitable than it is and quietly funds the next machine out of nothing, which is the reason so many equipment heavy businesses are busy and have no cash.
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 an 80 percent markup?
44.4 percent. On a $10,000 cost that is an $18,000 price and $8,000 of gross profit.
Should I charge for equipment I already own?
Yes, at a rate for the hours or days used. The machine has a purchase price, fuel, maintenance, insurance and a replacement date, and the job consumes all of it whether or not you invoice for it.
What rate should owned equipment go on the job at?
Close to what renting the same machine would cost. Put that figure in the cost column and mark it up like any other cost, or the job looks more profitable than it is.
The markup vs margin calculator takes any dimensions you like and hands back the same list.