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Contractor Markup Calculator

Markup and margin are different numbers. This prices the same job both ways so you can see the gap before you quote it.

Contractor Markup Calculator estimate

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Your estimate

Enter values, then calculate.

How the estimate works

Total job cost equals materials plus labor plus subcontractors, plus overhead applied as a percentage of that direct cost. Marking up multiplies job cost by one plus the target. Pricing to a margin divides job cost by one minus the target, which always produces a higher price.

Worked example

Example: $4,000 materials, $5,000 labor, and $2,000 subcontractors is $11,000 of direct cost. With 15% overhead the job costs $12,650. A 20% markup prices it at $15,180, which is only a 16.67% margin. Pricing for a true 20% margin requires $15,812.50, about $632 more.

Important limitation

Adding a 20% markup does not produce a 20% margin; it produces a 16.67% margin. Contractors who price at markup while budgeting at margin lose the difference on every job. Overhead here is a simple percentage of direct cost, so a job with an unusual labor-to-material mix may need a different recovery method. Results are estimates only and are not financial, lending, legal, tax, or investment advice.

Assumptions and review

Formula review: July 29, 2026. This tool uses only the editable values shown above and does not pull live rates, prices, balances, or account data.

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Frequently asked questions

How does the contractor markup calculator work?

Total job cost equals materials plus labor plus subcontractors, plus overhead applied as a percentage of that direct cost. Marking up multiplies job cost by one plus the target. Pricing to a margin divides job cost by one minus the target, which always produces a higher price.

Is this contractor markup calculator exact?

No. It is a planning estimate based on the values you enter. Actual rates, fees, timing, taxes, and provider rules can change the result.

Can I change the assumptions?

Yes. Every displayed input is editable so you can compare scenarios instead of relying on a hidden default.