Rate & Margin CentreAvailableReviewed 15 Sept 2026

Markup vs Margin Calculator

Work out sell price, margin, and profit from your cost and markup — and see why markup and margin are not the same number.

Try an example:

Sell price ex GST: $48,000
Profit (ex GST): $8,000
Markup: 20%
Margin: 16.7%

A cost of $40,000 with a 20% markup gives a sell price of $48,000 ex GST. That is a 16.7% margin, because margin is measured against the sell price, not the cost.

Markup and margin both describe the gap between cost and sell price, but they are measured against different bases. Markup is profit as a percentage of cost. Margin is profit as a percentage of sell price. Using one where you mean the other is one of the most common pricing mistakes builders make.

A 25% markup does not produce a 25% margin — it produces a smaller margin, because the sell price is the bigger number in the margin calculation. Builders who quote a markup they read online without checking the resulting margin often end up recovering less profit than they think.

This calculator takes your job cost and a markup or margin percentage and shows the sell price, profit, and the other percentage, so you can quote with the number you actually meant.

Worked Example

A builder has $40,000 in materials and labour cost for a job and wants a 20% markup.
Sell price = $40,000 x 1.20 = $48,000. Profit = $8,000.
Margin = $8,000 / $48,000 = 16.7% — noticeably lower than the 20% markup used to get there.

Quick Answers

What is the difference between markup and margin?

Markup is profit divided by cost. Margin is profit divided by sell price. The same dollar profit gives a higher markup percentage than margin percentage, because cost is always a smaller number than sell price.

Which one should I quote from?

Either works if you use it consistently and check the other number before sending a quote. Many builders think in markup but should confirm the resulting margin covers their real overhead and profit targets.