Calculators
Contractor Markup Calculator
Calculate a contractor's selling price from direct costs, overhead and target profit, and convert between markup and margin.
- Runs in your browser
- Nothing uploaded
The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
Everything you enter stays on your own machine. Nothing is sent to us or to anyone else, which you can confirm in your browser network tab.
What people use it for
- Pricing construction bids
- Training estimators on markup versus margin
- Checking job profitability
- Setting company pricing policy
About this tool
What the Contractor Markup Calculator does
Contractors need a price that covers direct job costs, a share of company overhead and a profit. Mixing up markup and margin is one of the most common reasons construction businesses underprice: a 25% markup only produces a 20% margin. This calculator works from your overhead and profit targets as margins.
Formula
- Price = direct cost ÷ (1 − overhead % − profit %)
- Markup = (price − cost) ÷ cost
- Overhead and profit are percentages of the selling price
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Labour cost | $12,000 |
| Materials | $8,000 |
| Subcontractors | $5,000 |
| Equipment and other direct costs | $1,000 |
| Overhead as share of price | 15% |
| Profit as share of price | 10% |
| Result | Value |
|---|---|
| Selling price | $34,667 |
| Markup on cost | 33.3% |
| Profit | $3,467 |
| Overhead recovered | $5,200 |
| Direct cost | $26,000 |
How to read the result
To reach a 25% gross margin (15% overhead plus 10% profit) you need a 33.3% markup, not 25%.
Know your actual overhead percentage from last year’s accounts; guessing it is how profitable-looking jobs lose money.
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- Construction Overhead Calculator: Calculate a construction company’s overhead rate on direct costs, the markup needed to recover it and overhead per labour hour.
- Construction Bond Cost Estimator: Estimate a performance and payment bond premium from contract value using a tiered surety rate schedule.
- Material Cost Estimator: Estimate total material cost from a take-off list of quantities, unit prices and waste, plus sales tax and delivery.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
It depends on overhead and profit targets; many general contractors need markups of 25% to 50% on direct costs.
Markup is a percentage of cost; margin is a percentage of the selling price.
Divide annual overhead costs by annual revenue.
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- Working since
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