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

No. A 20% markup on cost gives a 16.7% margin on price. To keep 20% of the price you need a 25% markup. The calculator shows both every time so the two cannot be confused.

What markup should a contractor use?

Whatever covers your overhead and the profit you need on your risk — a figure that depends on your business and your market, not on a rule of thumb. This calculator does not suggest one. Enter your overhead share and it will at least show what a given markup leaves after overhead.

Does markup include overhead?

It has to, unless overhead is already inside your cost figure. Enter the overhead share as a percentage of cost and the calculator splits the markup into overhead recovered and net profit. Do not enter it in both places.

Cost

Construction Markup Calculator

Price from cost and markup, markup from cost and price, or the markup you need for a target margin — with the margin shown every time.

Markup

Price

Waiting on you

Enter your cost. Nothing here is assumed about what a job costs or what a contractor marks up.

The working

Price = Cost × (1 + Markup)
Markup is a fraction of cost, not of the price it produces.

Enter your cost and whichever other figure you have. The calculator gives the price, the gross profit, the markup as a percentage of cost and the margin as a percentage of price — because they are never the same number, and quoting the wrong one is the most common arithmetic error in contract pricing. Split the markup into overhead and profit if you want to see what the job actually leaves.

How this calculator works

Specification

Formula version: 1.0.0
Last reviewed: 2026-09-03
External data: None

This tool uses only your inputs and exact unit conversions. No benchmark, average or market figure is built into it. How we calculate

What this calculates

The relationship between cost, price, markup and margin, from whichever pair you have. Markup is the fraction of cost you add; margin is the fraction of the price that is profit. They describe the same money against different bases, so either converts exactly into the other — and they are never equal for the same job.

The three questions

Cost and markup: price = cost × (1 + markup). This is how a quote is built.

Cost and price: markup = (price − cost) ÷ cost, and margin = (price − cost) ÷ price. This is how a quote is checked.

Cost and target margin: markup = margin ÷ (1 − margin). This is the one that catches people out — a 20% margin needs a 25% markup, and applying 20% as a markup leaves 16.7%.

Overhead and profit

Markup has to pay for two things: the overhead the job carries (office, insurance, vehicles, the estimating you did to win it) and the profit that is left. Enter the overhead share as a percentage of cost and the calculator separates them. It does not suggest a share — overhead is a fact about your business, not about construction.

What is deliberately not here

A typical contractor markup. Several pages on this search state a range; none says where it comes from, and a figure that is right for a remodeler in one market is wrong for a site contractor in another. Your markup comes from your overhead, your risk and your market. The calculator does the arithmetic on it and stops there.

Worked example

A $10,000 job — the same 20% two ways

Given

Cost: $10,000
The figure in your head: 20%

Step by step

As a markup: price= 10,000 × 1.20= $12,000
Margin that leaves= 2,000 ÷ 12,000= 16.7%
As a margin: markup needed= 0.20 ÷ (1 − 0.20)= 25%
Price for a 20% margin= 10,000 × 1.25= $12,500

Difference$500 on one quote, from one word

What it assumes

Cost is the full direct cost of the job before markup.
Markup and overhead share are percentages of cost; margin is a percentage of price.
Prices are before sales tax.

What it does not do

It does not estimate cost — the excavation, trenching and land clearing cost calculators do that from quantities and your rates.
It does not know your overhead rate, your risk premium or your market. It does not suggest a markup.
It treats overhead as a share of cost. If your accounts allocate overhead differently, enter it the way they do.

Common questions

Is a 20% markup the same as a 20% margin?: No. A 20% markup on cost gives a 16.7% margin on price. To keep 20% of the price you need a 25% markup. The calculator shows both every time so the two cannot be confused.
What markup should a contractor use?: Whatever covers your overhead and the profit you need on your risk — a figure that depends on your business and your market, not on a rule of thumb. This calculator does not suggest one. Enter your overhead share and it will at least show what a given markup leaves after overhead.
Does markup include overhead?: It has to, unless overhead is already inside your cost figure. Enter the overhead share as a percentage of cost and the calculator splits the markup into overhead recovered and net profit. Do not enter it in both places.

Behind the numbers

The methods and definitions this calculator applies, explained in full.

GuideMarkup vs margin in constructionMarkup is a percentage of cost, margin is a percentage of price. The conversion formulas, a worked example and the full table.

Where people go next

All cost tools →

Ordered by what usually comes next in the same job, not by keyword.

CostExcavation CostPrice an excavation from the dimensions up, using your unit rates or your hourly rates.CostTrenching CostPrice a run of trench per linear foot, per cubic yard or by the hour — with backfill, bedding and restoration.CostLand Clearing CostPrice clearing a parcel by the acre, by the square foot or by the hour — plus trees, stumps and debris.MeasurementCubic YardConvert length, width and depth into cubic yards — with feet and inches mixed freely.