See the difference between markup and margin.
Markup and profit margin sound similar, but they give you different selling prices. Enter your cost and the percentage you want to use to see what you should charge and how much profit that leaves.
Worth knowing
Markup and margin both describe profit, but they calculate it from different starting points. Markup compares your profit with what something cost you, while margin compares your profit with the price you charged the customer. That’s why the percentages aren’t interchangeable.
For example, something that costs you £100 and is sold for £150 has a 50% markup, but a 33.3% margin. To achieve a 50% margin on that same £100 cost, you would need to sell it for £200.
Materials are an obvious place to use this calculation, but it works for anything you buy and recharge to a customer. That could include equipment hire, skips, subcontractors or other costs you want to make a margin on.
This calculator helps you compare the figures and work out the selling price you need. It’s a guide rather than financial advice, so make sure your pricing also accounts for the other costs of running your business.
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