Markup vs. Margin Calculator — Marawood Construction Accounting

Understanding the Difference

Markup

Profit expressed as a percentage of your cost. "I add 20% on top of what it costs me."

Price = Cost × (1 + Markup%)
Profit = Cost × Markup%

Margin

Profit expressed as a percentage of your selling price. "I keep 20% of every dollar I bill."

Price = Cost ÷ (1 − Margin%)
Profit = Price × Margin%

Your Numbers

Total Job Cost?All direct costs for this job — labour, materials, subcontractors. Does not include overhead.

Your Markup %

20%

Your Target Margin %

20%

Using Markup

Job Cost—

Markup Amount—

Bid Price—

Actual Gross Margin %—

Markup required for same margin—

—

Gross Profit

Using Margin

Job Cost—

Gross Profit Amount—

Bid Price—

Equivalent Markup %—

Additional profit vs. markup—

—

Gross Profit

—

How the Gap Grows — Profit Gap at Every Markup % (on this job cost)

Gross Profit using Markup

Gross Profit using same % as Margin

Profit Gap (shaded)

Quick Reference — Markup to Margin Conversion

Next Steps — Marawood Construction Accounting

Your pricing may be costing you more than you think

The math is clear. Is your estimating system using it?

Most contractors discover they have been systematically underpricing for years — not because they bid too low on costs, but because they used the wrong percentage. Marawood works with construction businesses to build pricing systems that protect margin on every job, not just in theory.

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