Free tool: bid pricing
Contractor markup calculator: markup vs margin, overhead and profit
Add your overhead and profit to the direct cost, see the bid price, and convert markup to margin and back. Every percentage is yours; the calculator assumes none.
Fixed price in 2 business hours. Pay only after you accept.
- Fixed price agreed before any work starts
- Plan review is free
- You pay only after you accept the price and delivery date
- Single-trade estimates in 48 hours
Quick answer
Markup is the amount added to cost, as a percentage of cost. Margin is the same amount as a percentage of the selling price. A 25% markup on $100 of cost gives a $125 price and a 20% margin. This calculator adds your overhead and profit, shows the bid price and converts markup to margin both ways.
Bid pricing: markup and margin
Contractor markup calculator
Add overhead and profit to your direct cost, or work back from a target margin. See the bid price, the markup on cost and the margin on price.
Results
Bidding a commercial job? Send the plans and get a measured takeoff
Get a fixed quote Fixed price in 2 business hours. Plan review is free. Pay only after you accept.Need the whole job measured? This calculator covers one area at a time. Send the plans and we return the full takeoff and estimate. Fixed quote within 2 business hours. Plan review is free, and you pay only after you accept.
Get a fixed quoteHow to use the contractor markup calculator
Pick what you want to work out, enter your own numbers and read the result. Nothing is pre-filled: the calculator never assumes a percentage for you.
- Bid price from overhead and profit. Enter the direct cost, your overhead percent and your profit percent. Choose whether profit is taken on cost plus overhead or on direct cost only.
- Bid price from a target margin. Enter the direct cost and the margin you want on the selling price.
- Margin from a markup. Enter a markup percent to see the margin it gives.
- My overhead rate. Enter last year’s overhead and direct job costs to get your own overhead percent.
Leave the direct cost blank and every result is shown per $100 of cost, which is the quickest way to compare percentages.
Markup vs margin: what is the difference?
Markup and margin use the same dollars but divide by different numbers. Markup is the amount added, divided by the cost. Margin is the same amount divided by the selling price. Because the price is always larger than the cost, the margin is always the smaller percentage.
| Measure | Formula |
|---|---|
| Markup | (Price - cost) / cost |
| Margin | (Price - cost) / price |
| Margin from markup | Markup / (1 + markup) |
| Markup from margin | Margin / (1 - margin) |
| Price from markup | Cost x (1 + markup) |
| Price from margin | Cost / (1 - margin) |
Example on $100 of cost: a 25% markup gives a $125 price. The $25 is 25% of the cost and 20% of the price.
Markup to margin conversion table
Every figure below is arithmetic on $100 of direct cost. None of them is a recommended rate.
| Markup on cost | Margin on price | Price for $100 of cost |
|---|---|---|
| 10% | 9.09% | $110.00 |
| 15% | 13.04% | $115.00 |
| 20% | 16.67% | $120.00 |
| 25% | 20.00% | $125.00 |
| 30% | 23.08% | $130.00 |
| 40% | 28.57% | $140.00 |
| 50% | 33.33% | $150.00 |
| 100% | 50.00% | $200.00 |
| Margin you want | Markup you need | Price for $100 of cost |
|---|---|---|
| 10% | 11.11% | $111.11 |
| 15% | 17.65% | $117.65 |
| 20% | 25.00% | $125.00 |
| 25% | 33.33% | $133.33 |
| 30% | 42.86% | $142.86 |
| 40% | 66.67% | $166.67 |
| 50% | 100.00% | $200.00 |
Is a 30% markup the same as a 30% margin? No. A 30% markup gives a 23.08% margin. To earn a 30% margin you need a 42.86% markup.
Overhead and profit: what "10 and 10" means
“10 and 10” is shorthand for 10% overhead and 10% profit. It names a method, not a rate anyone has to accept. The arithmetic depends on what the profit is taken on:
- Profit on cost plus overhead: $100 + $10 overhead = $110; 10% profit on $110 = $11; price $121. Total markup 21%, margin 17.36%.
- Profit on direct cost only: $100 + $10 + $10 = $120. Total markup 20%, margin 16.67%.
State which method you used. On change orders, the contract usually decides it, and public owners write the percentages into their specifications. Iowa DOT’s standard specification (Article 1109.03), for example, adds 35% to force account labor for overhead and small tools, 15% to materials, and allows the prime contractor 10% on the first $50,000 of a subcontractor’s extra work and 5% above that. Those are one owner’s rules for extra work, not a market average for bids.
For change orders, see change order pricing.
What is a normal markup for a contractor?
There is no single normal markup, and we do not publish one: we found no current, sourced figure that fits every trade, region and job size. Your markup has to cover your own overhead plus the profit you need for the risk on that job.
Work it out from your books instead of from a rule of thumb:
- Divide last year’s overhead by last year’s direct job costs. That is your overhead rate on cost (the “My overhead rate” mode does this).
- Add the profit you need, judged by the job’s risk, size, schedule and how badly you want it.
- Check the result as a margin, because your bank, your bonding company and your income statement talk in margin.
What this markup calculator does not cover
It prices percentages on one cost figure. Keep these as separate lines in the estimate rather than inside the markup:
- Bonds and builder’s risk insurance, priced from your surety and broker
- Contingency for scope you cannot price yet
- Escalation on long schedules
- Sales tax on materials where it applies
- General conditions: supervision, temporary facilities and cleanup, priced as job costs
For the full sequence from takeoff to bid, see how to bid a construction project.
Before you send plans
Common questions about handing off the work
Why no default markup?
No sourced figure fits every trade and market. Your own overhead and risk set it.
Can I bid from these numbers?
Only if the direct cost is right. The markup is only as good as the takeoff under it.
Who sets my final price?
You do. Bidmere prices quantities at your rates; markup and the final number stay with you.
Questions
Frequently asked questions
Is 30% markup the same as 30% margin?
No. A 30% markup on $100 of cost gives a $130 price, which is a 23.08% margin. To earn a 30% margin you need a 42.86% markup, for a price of $142.86.
What is a normal markup for a contractor?
There is no single normal markup. It has to cover your own overhead and the profit the job’s risk justifies. Divide last year’s overhead by last year’s direct job costs for your overhead rate, add your profit, and check the result as a margin.
What does 10 and 10 mean in construction?
10% overhead and 10% profit. Taken on cost plus overhead it adds 21% to direct cost (a 17.36% margin); taken on direct cost only it adds 20% (a 16.67% margin). On change orders the contract usually sets the method and the percentages.
How do I calculate overhead and profit?
Overhead is your direct cost times your overhead rate. Profit is your profit rate times either the cost plus overhead or the direct cost alone, whichever method you use. The bid price is cost plus overhead plus profit. The calculator shows each line.
How do I convert margin to markup?
Markup equals margin divided by 1 minus the margin. A 20% margin needs a 25% markup: 0.20 / 0.80 = 0.25. The other way, margin equals markup divided by 1 plus the markup.
Does the calculator store what I enter?
No. It runs in your browser and does not send or save your entries. Use the copy results button to paste the figures into your estimate or an email.
Can Bidmere price my job?
Yes. Bidmere measures your plans and prices the quantities at your rates; you set the markup and the final number. Single-trade estimates are from $195 and ready in 48 hours after you accept a fixed quote, which you get within 2 business hours.
For your website
Embed this calculator
You can put the contractor markup calculator on your own website for free, for example on a trade association, school or company resources page. Copy the code below into your page’s HTML. It shows the same calculator in a frame that fits phone screens, with a visible “Calculator by Bidmere” credit that links back to this page.
Get a fixed quote
Share the project basics. You get a fixed price and delivery date within 2 business hours. Plan review is free, and you pay only after you accept.
Sources
- Iowa DOT Standard Specifications, Article 1109.03 (force account and subcontract markups): https://ia.iowadot.gov/erl/current/gs/content/1109.htm