Profit margin and markup calculator
Enter what a job costs you, then choose a target margin, markup or selling price. See what to charge and how much gross profit the job leaves before overhead and taxes.
What should I charge for a job that costs $200?
A plumber spends $80 on parts and three hours at a labor cost of $40 per hour. The job costs $200. For a 20% gross margin, divide $200 by 0.80. The selling price is $250 before tax, leaving $50 gross profit. Adding 20% to cost would give a different price, $240.
Shopify’s margin and markup formulasHow do I calculate profit margin?
Subtract cost from selling price and divide the difference by selling price. Multiply by 100 for a percentage. A $50 gross profit on a $250 sale gives a 20% margin.
What is the difference between margin and markup?
Margin uses selling price as the denominator. Markup uses cost. The same $50 profit is a 20% margin on a $250 sale and a 25% markup on its $200 cost.
Which costs should I enter?
Include the materials, labor, subcontractors and other direct costs of delivering this job. Compare costs and selling price on the same tax basis. Use the VAT calculator if you need to add tax to the resulting price.
Why does the target price sometimes round up?
A price based on a target percentage rounds up to the next cent when necessary to meet that target. For a known price, the calculator reports the margin actually earned. A dash means its calculation would require dividing by zero.