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Markup vs margin calculator

Markup and margin are the most-confused numbers in the trades, and mixing them up is how a job that looks profitable quietly loses money. Markup is profit divided by cost; margin is profit divided by the price. Because the denominators differ, the same dollars are always a larger markup than margin: a 50% markup is only a 33% margin. Enter your job cost, then a target margin percent, a target markup percent, or a price, and this calculator solves the rest, including the profit dollars. Price to the margin you need to cover overhead and leave real profit, then check what markup that takes. Treat the result as a starting point and confirm against your own overhead recovery and job-cost numbers.

anvilfield.com/calculators/markup-margin-calculator · Free field calculators and FieldOS. A planning estimate, verify against the code, the manufacturer, and the engineer of record.

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Markup & margin FAQ

How do you estimate electrical work?

Take off the count of every device, fitting, fixture, and foot of conduit and wire from the plans. Multiply each count by its labor unit for labor hours, price the material from a supplier quote, add direct job expenses, then apply overhead and profit. The recap rolls it into the bid number.

What is a labor unit in electrical estimating?

A labor unit is the labor hours to install one item under normal conditions, such as a receptacle or a hundred feet of conduit. Multiply the count by the labor unit for the hours. The NECA Manual of Labor Units is the common source, but you tune it to your own crews and conditions.

What is included in an electrical bid?

An electrical bid includes the labor hours times the burdened rate, the priced material, direct job expenses like permits and rental, subcontractor and gear quotes, and overhead and profit on the total cost. A written scope with exclusions defines what the price covers and protects the number after you win the job.

How do you add overhead and profit to an electrical estimate?

Total the job cost first, then add overhead as a percentage that covers your office and indirect costs, commonly in the low-to-high teens, and add profit as a separate markup set by the risk and how busy you are. Calculate both from your own books, not a generic number.

What is the difference between markup and margin?

Markup is profit as a percentage of your cost; margin is the same profit as a percentage of the price you charge. They are not equal. A 25 percent markup gives a 20 percent margin. Set prices in one language consistently, or the margin you book comes in lower than the one you planned.

More in the Electrical estimating and bidding field guide.