Free contractor markup calculator

Add the costs of a job, include the overhead assigned to it, and enter a markup percentage. The calculator shows the quote price, markup amount, and gross margin without storing or sending the values you enter.

Build the quote from real job costsAdd overhead and markup after every direct cost is visible.

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Free, no sign-up, and no cost values leave this page.

Job cost and markup

How to use the contractor markup calculator

Build a quote from the costs of delivering the job, then see what the chosen markup leaves after those costs. Keep direct costs, assigned overhead and the markup amount separate so you can explain and revise the price.

Add direct job costs
Enter materials, labor, subcontractors, equipment and other costs attributable to this job. Use cost amounts, not already-marked-up selling prices.
Assign the job's overhead
Enter an allocation of the business expenses this job must help recover. Do not include the same expense again if it is already contained in a loaded labor or equipment rate.
Enter the markup percentage
Markup is applied to the combined direct-cost and assigned-overhead total. Enter 25 for a 25% markup; that produces a 20% margin on this cost basis, not a 25% margin.
Review and prepare the quote
Check total cost, markup amount and price before tax. Use the estimate link to carry the overall price into a document, then add a clear scope, itemization, exclusions and payment terms.

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Build a complete job-cost basis

A markup calculation cannot recover an expense that never entered the estimate. Measure quantities, obtain current supplier prices, estimate the labor needed to complete the scope and identify outside services before choosing the percentage. For staged work, distinguish today’s quote assumptions from prices that may change before purchase.

Input	Include	Avoid counting twice
Materials	Purchased quantities, expected waste and job-specific delivery	Delivery already included in a supplier total
Labor	Person-hours × loaded cost per hour	Employer costs already in the loaded rate
Subcontractors	Accepted scope and quoted outside-service cost	The same activity in employee labor
Equipment	Job rental or a consistent owned-equipment allocation	Depreciation in both equipment and overhead
Other direct costs	Project permits, site disposal and identifiable travel	An expense already listed elsewhere
Assigned overhead	The project's share of running the business	Owner pay or insurance already recovered in another input

Count paid estimating, procurement and supervision time somewhere appropriate to your own costing method. Owner labor is not automatically free. A subcontractor price is not automatically the final customer price: coordination and contract responsibility may add costs of your own.

Allocate overhead consistently

Overhead covers costs that support the business without belonging entirely to one job: premises, general administration, software, marketing and business insurance are common examples. Decide which expenses are indirect in your accounts before allocating them; the same item can be treated differently by businesses with different operating models.

Overhead per productive hour = period overhead ÷ realistic productive hours
Job overhead = overhead per productive hour × job hours

For example, 9,000 of monthly overhead spread over 300 productive hours gives 30 per hour. A 20-hour job is assigned 600. Dividing by all calendar hours would make the allocation too small if most of those hours cannot earn revenue.

Other methods allocate overhead by direct labor cost or another documented driver. Use one method that suits the business and compare expected recovery with actual overhead. The calculator accepts the resulting amount; it does not select an allocation method or audit the accounts.

Understand markup versus margin

Markup and margin describe the same difference between price and cost using different denominators. Markup is a percentage of cost; margin is a percentage of selling price. On a 6,000 cost basis, adding 20% creates a price of 7,200 and a 1,200 difference. That difference is 16.67% of the price.

C = direct costs + assigned overhead
Markup amount = C × markup % ÷ 100
Price P = C × (1 + markup % ÷ 100)
Margin % = (P − C) ÷ P × 100

Here, the displayed margin uses the full entered cost basis, including assigned overhead. Accounting gross margin often uses only cost of sales. Do not compare the displayed figure with a financial statement until both use the same definition. It is also not necessarily after-tax net profit.

Markup on cost	Price when cost is 1,000	Margin on the entered basis
10%	1,100	9.09%
20%	1,200	16.67%
25%	1,250	20.00%
33.333…%	1,333.33	25.00%
50%	1,500	33.33%
100%	2,000	50.00%

Convert a target margin into the required markup

If you start with a target margin, do not type that number into the markup field. Solve for the selling price first, or convert the target to a markup rate.

Price = cost ÷ (1 − target margin % ÷ 100)
Required markup % = target margin % ÷ (100 − target margin %) × 100
Margin % = markup % ÷ (100 + markup %) × 100

At a cost of 8,000 and a target margin of 25%, price is 8,000 ÷ 0.75 = 10,666.67. The corresponding markup is 33.333…%. Entering 25% markup would instead produce 10,000, leaving only a 20% margin. For exact target pricing, use the profit margin calculator or retain sufficient precision in the conversion.

A 100% margin cannot be achieved by a finite positive selling price when cost is positive. A 100% markup is perfectly different: it simply doubles the entered cost.

Allow for scope, uncertainty and payment conditions

There is no single correct markup for every contractor. The suitable price depends on what the business must deliver, the costs it accepts, its capacity and the contract. Competitor prices are useful only when you compare equivalent scope, finish, warranty and timing.

Define exclusions: identify demolition, disposal, hidden damage, access and permits that are not covered.
Separate contingency from profit: if an allowance is included for uncertain work, record it in the cost basis once; it is not guaranteed profit.
Price changes: state quote validity and any agreed adjustment mechanism for delayed purchases.
Payment timing: consider deposits, progress payments and financing costs without counting collected tax as revenue.
Capacity: a low markup on a fully booked schedule may leave too little money to fund the business; a high markup does not compensate for unachievable labor assumptions.

See what cost overruns and discounts do to the result

Once a fixed price is agreed, an increase in cost reduces the remaining amount unless an approved change also increases the price. Review this risk before committing to a quote.

Scenario	Price	Actual cost	Remaining amount	Margin
Original estimate	7,200	6,000	1,200	16.67%
Cost rises 10%	7,200	6,600	600	8.33%
Customer receives 5% discount	6,840	6,000	840	12.28%
Both happen	6,840	6,600	240	3.51%

These are arithmetic scenarios, not forecasts. Reducing the price by 5% removes 360 from the original 1,200 remaining amount—a 30% reduction. If the scope changes, prepare a clearly priced variation rather than quietly changing the original cost record.

Turn the calculation into a customer-ready estimate

The calculator's estimate link transfers an overall quote amount, not a complete scope of work. In the estimate generator, add quantities, service descriptions, materials, exclusions, schedule, tax treatment and payment terms. Keep your internal cost sheet separate from the customer-facing selling-price breakdown.

Use the print control for a local PDF or paper copy of the calculation, and review the browser's print preview. Compare the finished job's actual costs with the original assumptions; use the difference to improve future quantities, productive-hour estimates and overhead allocation.

Contractor markup examples

Illustrative calculations, not market quotes. Replace these assumptions with your own costs and measurements.

Build the quote from six cost categories

A small renovation uses the following illustrative costs in USD.

Cost	Amount
Materials	$2,500
Labor	$1,600
Subcontractors	$800
Equipment	$400
Other direct costs	$200
Assigned overhead	$500

Direct costs total 5,500; with overhead, C = 6,000. At 20% markup, the added amount is 1,200 and the quote is 7,200 before tax. Margin on the entered basis is 1,200 ÷ 7,200 = 16.67%.

$7,200 quote · 20% markup · 16.67% margin

Quote for a 20% target margin

A repair job has 3,600 of direct costs and 400 of overhead. Its total basis is 4,000. A 20% target margin requires a 25% markup, because 20 ÷ (100 − 20) × 100 = 25.

Price = 4,000 ÷ 0.80 = 5,000
Markup amount = 5,000 − 4,000 = 1,000
Margin = 1,000 ÷ 5,000 = 20%

Typing 20 in the markup field would produce 4,800 instead. The distinction changes the quote by 200.

5,000 price · 1,000 above the entered cost

An approved variation

The customer adds work costing 900 in materials, 450 in labor and 150 in assigned overhead. The extra cost basis is 1,500. Applying the agreed 30% markup creates a 450 addition and a 1,950 variation price before tax.

Keep the variation separate from the original scope and document approval before treating the revised total as agreed. The variation margin is 450 ÷ 1,950 = 23.08%; it is not 30%.

1,950 variation price · 23.08% margin

Contractor markup questions

What markup should a contractor charge?

There is no universal rate. Calculate complete costs, overhead recovery, scope risk and required return, then compare equivalent local offers. The example percentage is not a recommended industry standard.

Is 20% markup the same as 20% profit margin?

No. A 20% markup gives a 16.67% margin on the same cost basis. A 20% margin requires a 25% markup.

Should I mark up materials and subcontractors?

That depends on the contract and costing model. Include their actual cost and the costs you incur managing the work. This calculator applies one entered markup to the entire cost basis; it does not assign category-specific rates.

Is overhead part of the markup amount?

In this calculator, overhead is a separate cost added before markup. Do not also treat that same overhead amount as profit or add it twice through loaded rates.

Does the quote include sales tax?

No. The displayed quote is before tax. Apply the correct treatment in the estimate or invoice; tax collected for a government is not contractor profit.

Can a markup exceed 100%?

Mathematically, yes. A 150% markup turns a cost of 100 into a price of 250, giving a 60% margin on that basis. Suitability is a commercial and contractual question, not an arithmetic limit.

Why does the displayed gross margin differ from my accounts?

The calculator subtracts all entered direct costs and assigned overhead. Your accounts may define gross profit using cost of sales only, with overhead deducted later. Compare figures using the same basis.

How do I calculate this in Excel?

If B2 contains total cost and B3 contains markup as a percentage-formatted value, price is =B2*(1+B3). Margin is =(B4-B2)/B4 when B4 holds the price; format the answer as a percentage without multiplying it again.