Contractor margin calculator

Margin is profit as a percentage of the price you charge: margin% = (price − cost) ÷ price. On a $1,300 job that cost you $1,000, the profit is $300 and the margin is $300 ÷ $1,300 = about 23%. To go the other way — from a margin you want to the price you need — divide instead: price = cost ÷ (1 − margin). A $1,000 cost at a 30% target margin needs a price of $1,000 ÷ 0.70 = about $1,429.

It depends on the trade and the job. Many residential contractors aim for a gross margin around 20–30% on larger jobs and more on small repairs, where the overhead per job is proportionally higher. What matters more than the benchmark is that the number covers your actual overhead and leaves the profit you want — work it out from your own costs rather than from a competitor’s price.

Markup is profit as a percentage of your cost; margin is profit as a percentage of the price you charge. They are not the same: a 30% markup on a $1,000 cost gives a $1,300 price, which is only a 23% margin. Contractors who quote off "margin" but calculate "markup" (or vice versa) systematically underprice.

It varies by trade and job type. As a rough guide, many residential contractors use 20–30% for larger jobs and 30–50% (or more) for small repairs, where overhead per job is proportionally higher. Your right number covers overhead plus the profit you want — start from your costs, not a competitor’s price.

Price = cost × (1 + markup%). For a $1,000 cost at 30% markup: $1,000 × 1.30 = $1,300. Profit is $300, and the margin is $300 ÷ $1,300 = about 23%.

The reliable way is software that applies your markup and margin rules automatically when you build an estimate, so every quote is priced right without manual math. Hero365 builds priced estimates for you and keeps your markup consistent across jobs.