Markup and margin calculator
Type the cost of the job and the markup or the margin you want. The price, the profit and the other percentage update as you type. Nothing is sent anywhere.
Markup is on cost, margin is on price
Markup is the profit divided by the cost. Margin is the profit divided by the price. On a $10,000 job priced at $12,500, the profit is $2,500: that is a 25% markup and a 20% margin.
Pricing with your target margin typed in as markup charges less than you meant: a 20% markup only leaves a 16.7% margin.
Formulas
Price = cost x (1 + markup). Margin = markup / (1 + markup). Markup = margin / (1 - margin).
10% markup
9.1% margin
20% markup
16.7% margin
25% markup
20% margin
33.3% markup
25% margin
50% markup
33.3% margin
100% markup
50% margin
Markup in Groundflag
Each price book item keeps a unit cost and a markup, and its price is the cost plus that markup. Time and materials tickets add the company's default markup, so the field bills the same way the office prices.
Questions
What is the difference between markup and margin?
Markup is profit as a share of cost; margin is profit as a share of the selling price. The same job always shows a higher markup than margin.
How do I convert a margin into a markup?
Divide the margin by one minus the margin. A 30% margin needs a 0.30 / 0.70 = 42.9% markup.
Can a margin be 100% or more?
No. A margin of 100% would mean the job cost nothing. Markup has no ceiling.
Keep reading
Questions? Write to hello@groundflag.com