Markup vs Margin Calculator
Turn what a job costs you into the price that actually earns your target margin — and see, in dollars, what quoting the same percentage as a markup would quietly give away. It runs on the same pricing calculation as PlankCAD's estimator.
Calculator
Everything the job costs you: materials, waste, labour and overhead.
Gross margin: profit as a share of the selling price. 0 to 95.
Result
Price for a 30% margin
$2,030.66
Cost ÷ (1 − margin). This is the price that actually keeps that share of every dollar.
This works from the cost you enter, so it is only as accurate as that number. Leave out shop overhead, waste or your own hours and the margin shown is one you will not actually earn. It prices before sales tax; tax is added on top.
Markup vs margin, in one sentence
Markup is profit as a percentage of what the job costs you; margin is profit as a percentage of what the customer pays — so the same 30% is a different amount of money depending on which one you mean.
Because margin is measured against the larger number, it always reads lower than the markup that produces it. A 30% markup only keeps 23.1% of the price. To actually keep 30%, you need a 42.9% markup.
The four formulas
Write the percentages as decimals, so 30% is 0.30. Each of these is what the calculator above runs.
- Price for a margin = cost ÷ (1 − margin)
- Price with a markup = cost × (1 + markup)
- Margin a markup really keeps = markup ÷ (1 + markup)
- Markup needed for a margin = margin ÷ (1 − margin)
Worked example: an oak kitchen island
A 1200 × 900 × 900 mm freestanding island — solid oak top, birch ply carcass, three soft-close drawers, hardwax oil — costs $1,421.46 to make once materials, waste, labour and shop overhead are all counted. That is the same job priced line by line on our worked example page.
The shop wants a 30% margin. Priced as a margin it is $2,030.66; priced as a 30% markup it is $1,847.90. The markup quote looks reasonable and is $182.76 short on a single job — and every job priced that way is short in the same proportion.
| 30% margin | 30% markup | |
|---|---|---|
| Cost to make | $1,421.46 | $1,421.46 |
| Price to the customer | $2,030.66 | $1,847.90 |
| Profit | $609.20 | $426.44 |
| Profit as a share of price | 30% | 23.1% |
| Left on the table | $0.00 | −$182.76 |
Margin to markup conversion table
The gap widens as the margin rises: at 20% the markup you need is only five points higher, at 50% it is double. If your quotes are priced with a markup, find the margin you meant to earn and use the markup beside it.
| Target margin | Markup needed |
|---|---|
| 20% | 25% |
| 25% | 33.3% |
| 30% | 42.9% |
| 35% | 53.8% |
| 40% | 66.7% |
| 50% | 100% |
Related calculators
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Free to use on any site. Paste this where you want the calculator to appear — it keeps working as we improve it, and the credit line names the source.
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<a href="https://plankcad.com/tools/markup-vs-margin-calculator">Markup vs Margin Calculator</a> by PlankCAD
</p>- Every figure in the example above comes from the oak island priced line by line.
- For working out the cost basis in the first place, read how to price woodworking.
- Labour is usually the biggest cost to get right — see our guide to your woodworking shop hourly rate.
Price every job this way, automatically
PlankCAD builds each estimate from your real costs — materials, waste, labour and overhead — and prices it at the margin you set, using this same calculation. Then it turns the result into a quote your customer can accept.
Common questions
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. On a job that costs $1,421.46, a 30% markup prices it at $1,847.90, while a 30% margin prices it at $2,030.66. They are the same only at zero.
No. A 30% markup keeps 23.1% of the price as profit, not 30%. On the $1,421.46 oak island that is the difference between $1,847.90 and $2,030.66 — $182.76 on one job.
42.9%. Divide the margin by one minus the margin: 0.30 ÷ 0.70 = 0.4286. The higher the margin you want, the faster the required markup climbs — a 50% margin needs a 100% markup.
Because margin is profit as a share of the price, a 100% margin would mean the job cost nothing to make. As the margin approaches 100% the price needed grows without limit. PlankCAD, and this calculator, stop at 95%.
Before. Margin is worked out on the selling price of the job, and sales tax is added on top of that price. Tax is money you collect for someone else, so counting it as part of your margin would overstate what the job earned.