Contractor Calculator
Contractor Markup Calculator
Calculate the markup percentage needed to achieve your target profit margin. Stop guessing and price for real profitability with this simple calculator.
Quick Answer
To achieve a 20% profit margin, use 25% markup. For 25% margin, use 33.3% markup. For 30% margin, use 42.9% markup. Formula: Markup = Target Margin ÷ (1 – Target Margin)
Markup Calculator
Required Markup
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How the Calculator Works
This calculator determines the markup needed to cover your overhead and achieve your profit target:
- Direct costs are your materials and labor for the job
- Overhead is added as a percentage of direct costs
- Profit margin is your target percentage of the selling price
- The calculator outputs the total markup multiplier and selling price
Common Markup Percentages
| Target Margin | Required Markup | $10,000 Cost Becomes |
|---|---|---|
| 15% | 17.6% | $11,765 |
| 20% | 25.0% | $12,500 |
| 25% | 33.3% | $13,333 |
| 30% | 42.9% | $14,286 |
| 35% | 53.8% | $15,385 |
Include Overhead First
Before calculating profit markup, make sure your overhead is included in the base cost. The formula above assumes you have already added your overhead allocation to direct costs.
Full Pricing Formula
For complete job pricing with separate overhead and profit:
- Step 1: Total Cost = Direct Costs × (1 + Overhead Rate)
- Step 2: Selling Price = Total Cost ÷ (1 – Target Margin)
Example: $10,000 direct costs, 35% overhead, 20% profit target
- Total Cost = $10,000 × 1.35 = $13,500
- Selling Price = $13,500 ÷ 0.80 = $16,875
- Profit = $16,875 – $13,500 = $3,375 (20% of selling price)
Are You Actually Profitable?
Most contractors think they know their margins. Our free Profit Score calculator shows the truth in 2 minutes.
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