Markup vs Margin Calculator
Enter your cost and what you want to earn — the calculator shows markup, margin, and the price that gets you there.
Runs entirely in your browser — your numbers never leave this page.
How it works
Margin and markup measure the same profit two ways — mixing them up is the classic freelancer pricing error:
Margin = Profit ÷ Price Markup = Profit ÷ Cost
- Margin is what you keep of every dollar charged. Markup is what you add to cost. A 30% margin = 42.9% markup — they are never equal.
- The trap: "I want 30%" applied as markup on $800 cost gives $1,040 — but that is only a 23% margin. You undercharged by $114.
- Convert: margin = markup ÷ (1 + markup); markup = margin ÷ (1 − margin).
- Price from margin: price = cost ÷ (1 − margin). Memorize this one — it is the formula that protects your profit.
- Quote clients in price, manage the business on margin, and never reveal either — clients buy outcomes, not your math.
Frequently asked questions
What is the difference between markup and margin?
Margin = profit ÷ selling price (what you keep). Markup = profit ÷ cost (what you add). $800 cost sold at $1,143: 30% margin, 42.9% markup.
Why does it matter which I use?
Because they give different prices. Aiming for "30%" as markup instead of margin on an $800 job undercharges by $114. Always price from target margin.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup). 50% markup → 33.3% margin. Reverse: markup = margin ÷ (1 − margin).
What margin should a freelancer target?
30–50% on project work after all costs including your time. Below 20% you are buying yourself a job; above 50% you are doing well.
Should I include my time in "cost"?
Yes — cost is materials + subcontractors + your hours at your rate + overhead share. Forgetting your own labor is the #1 margin killer.
What is a good markup in construction?
10–20% on materials is typical for contractors, with labor carrying the real margin. GCs often run 15–25% overall margin targets.
Can margin exceed 100%?
No — margin caps at just under 100% (you cannot keep more than the price). Markup has no cap, which is why the two confuse people.
How do I raise prices without losing clients?
Raise margin on new quotes first, grandfather existing clients briefly, and sell outcomes not hours. A 5-point margin lift on $200k revenue is $10k — pure profit.
Does discounting hurt margin more than I think?
Yes — brutally. At 30% margin, a 10% discount needs 50% more volume to break even. Discount rarely; add value instead.
Should clients see my margin?
No. Quote a price for the outcome. Revealing cost-plus math invites haggling on your profit — the one number that is none of their business.