Margin vs markup

A job that sells for 200 and costs 150 leaves 50 in gross profit. That is a 25% margin (50 ÷ 200) and a 33.33% markup (50 ÷ 150).

Price from your costs

To achieve a target margin, price = cost ÷ (1 − target margin as a decimal). At a 40% margin, a job costing 300 needs a 500 selling price. This is a mathematical example, not a recommended margin.

Pay for your own time

Include your labour at a realistic hourly cost. Two people working three hours equals six person-hours. If you omit your time, the displayed profit also has to pay you for doing the work.

Allow for costs beyond the job

Insurance, marketing, vehicle ownership, equipment replacement and administration still need funding. Allocate these to job expenses or assess them separately before treating gross profit as disposable income.

Calculate job profitability →