What is Profit Margin?
Profit margin is the percentage of the final selling price that remains after covering the full job cost. It answers: how much of the revenue did I actually keep?
Contractor pricing
Profit Margin Calculator
Know what you're actually making on each job, not just what you added on top.
Enter your job numbers
Know what you're actually making on each job, not just what you added on top.
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$
Labor, materials, and allocated overhead.
Results
Margin tells you what share of the selling price stays with you. Markup tells you what you added over cost.
- Profit
- $2,000.00
- Profit Margin
- 16.7%
- Markup
- 20.0%
The same $2,000.00 profit equals 16.7% margin on revenue and 20.0% markup on cost.
Watchout
If you price using markup but think in margin, your profit will be lower than expected.
Education
What is Markup?
Markup is how much you add on top of cost when setting the price. It answers: how much higher is my price than my cost?
Why they are not the same
Margin uses revenue as the base. Markup uses cost as the base. Because the math starts from different numbers, the percentages are different even when the profit dollars are the same.
Related tools
Profit only exists when your numbers are clear. Tracking revenue, cost, and approvals in one place keeps your margins real.
See the practical next steps