Profit Margin Calculator
Add up what the job costs you, pick the margin you want to keep, and get the price. Convert markup to margin, check a price you already sent, and see what a discount does to your profit.
What the job costs you example: a $300 handyman job
Why this number
Hours times what the hour costs you, including your own time. The example is 4 hours at $45.
Why this number
What you paid at the supply house, before any markup.
Why this number
This job's share of the truck, insurance, phone and software. Last year's overhead divided by billable hours, times the hours here.
Why this number
Drive time, permits, dump fees, a second trip. The drive counts.
Target margin
Why this number
Share of the price that is profit. Price = cost ÷ (1 − margin). Capped at 95%. 25% is the target used in the handyman pricing guide; yours is a decision, not a statistic.
25% margin is the same price as a 33.3% markup.
Price to send
$400at 25% margin
Margin, not markup. $100 of the $400 price is profit. On cost, that's a 33.3% markup.
| Labor | $180 |
| Materials | $60 |
| Overhead | $40 |
| Travel and other | $20 |
| Profit25% of the price | $100 |
| Price | $400 |
| −5% discount$380 price, 21.1% margin | $80 profit |
| −10% discount$360 price, 16.7% margin | $60 profit |
| −15% discount$340 price, 11.8% margin | $40 profit |
Your side (not on the estimate)
- Cost
- $300
- Price
- $400
- Profit
- $100
- Margin
- 25%
- Markup
- 33.3%
If you had used a 25% markup instead: price $375, profit $75, real margin 20%. Break-even: if the job runs $100 over cost, the profit is gone.
Markup vs margin: the difference that costs contractors money
Margin is profit as a share of the price. Markup is profit as a share of the cost. They describe the same dollars with different denominators, so the percentages never match: a 25% markup is only a 20% margin, and a 25% margin needs a 33.3% markup. Most pricing advice says "margin" and most contractors multiply by a markup, which is how a $400 job quietly becomes a $375 job.
Price = cost ÷ (1 − margin)
Margin = (price − cost) ÷ price · Markup = (price − cost) ÷ cost
Divide to price at a margin. Multiply only when you really mean markup. The profit margin calculator above does both and shows the gap.
Why it matters: your overhead, your slow weeks and your bad jobs all get paid from the profit line. If you meant to keep 25% and you're keeping 20%, that's a fifth of your safety margin gone on every estimate, and you won't see it until tax time.
Worked example: pricing a $300 handyman job at 25% margin
A $300-cost job at a 25% margin prices at $400, with $100 of profit. That is the same job priced step by step in how to price handyman jobs, and it's the calculator's default. Hypothetical job, real math.
| Line | Amount | Note |
|---|---|---|
| Labor | $180 | 4 hours at $45, including your own time |
| Overhead | $40 | This job's share of truck, insurance, phone |
| Materials | $60 | Supply house receipt, before markup |
| Travel | $20 | The drive counts |
| Cost | $300 | Everything above |
| Price at 25% margin | $400 | $300 ÷ 0.75 |
| Profit | $100 | 25% of $400 |
| The trap: 25% markup instead | $375 | $300 × 1.25. Profit $75, real margin 20% |
Same cost, same "25%", $25 less in your pocket. Across 200 jobs a year, that's $5,000 you did the work for and didn't get. The calculator prints the trap line under every price so you can see it before you send.
Markup to margin conversion table
Read across: the left column is the percentage, the middle is the margin you actually get if you use it as a markup, the right is the markup you need if you want it as a margin. The gap widens as the numbers grow: a 50% markup is a 33.3% margin, and a 50% margin means doubling your cost.
| Rate | Used as markup, your margin is | Wanted as margin, the markup is |
|---|---|---|
| 10% | 9.1% | 11.1% |
| 15% | 13% | 17.6% |
| 20% | 16.7% | 25% |
| 25% | 20% | 33.3% |
| 30% | 23.1% | 42.9% |
| 40% | 28.6% | 66.7% |
| 50% | 33.3% | 100% |
The formulas behind the table: margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin). The markup ↔ margin tab in the calculator runs them for any number, and adds a job cost if you want the price in dollars.
What a discount does to your profit
A discount comes off the price, but your cost doesn't move, so every dollar of it comes out of profit. On the $400 job, 10% off the price is 40% off your profit.
| Discount | Price | Profit | Margin |
|---|---|---|---|
| −5% | $380 | $80 | 21.1% |
| −10% | $360 | $60 | 16.7% |
| −15% | $340 | $40 | 11.8% |
If a customer needs a smaller number, take something out of scope instead: skip the haul-away, let them buy the paint, drop the second coat on the closet. The price drops and the margin stays. A discount for nothing in return is you paying to get the job.
What is a good profit margin for a contractor?
The target is a decision you make, not a number a website hands you. What counts as "good" depends on whether the labor line already pays you a real wage and whether overhead is in the cost or coming out of the profit. Once both are in, the margin is what's left for growth, slow months and the job that goes sideways.
Here's what three common targets do to the $300-cost job, so you can pick one with the dollars in front of you:
| Target margin | Price | Profit | Same price as markup |
|---|---|---|---|
| 20% | $375 | $75 | 25% |
| 30% | $429 | $129 | 42.9% |
| 40% | $500 | $200 | 66.7% |
Gross vs net: everything on this page is gross margin per job. Net margin is what's left for the whole business after every expense, including the ones you forgot to allocate. If your gross margin per job looks fine and the bank account doesn't, the overhead line is too small. Fix it there, then reprice.
Whatever number you pick, use it on every estimate, in the same word. In WinPal the cost and margin sit on your side of the estimate and the customer sees one clean price.
Common questions about markup and margin
What is the difference between markup and margin?
Markup is profit as a share of cost. Margin is profit as a share of price. On a $300 job priced at $400, the $100 profit is a 33.3% markup and a 25% margin. Same dollars, two percentages. Markup is always the bigger number, which is why pricing with markup while thinking in margin leaves you short.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup). A 25% markup is 0.25 ÷ 1.25 = 0.20, so a 20% margin. A 50% markup is 0.50 ÷ 1.50 = 33.3% margin. Type the markup into the calculator's markup ↔ margin tab and the margin fills in, with a table from 10% to 50% underneath.
How do I convert margin to markup?
Markup = margin ÷ (1 − margin). A 25% margin is 0.25 ÷ 0.75 = 33.3% markup. A 40% margin needs a 66.7% markup, and a 50% margin needs you to double the cost. Use it when your supplier quotes markup and your accountant talks margin.
What is a good profit margin for a contractor?
The target is yours to set, and it depends on whether you've already paid yourself in labor and overhead. On a $300-cost job, a 20% margin prices at $375 ($75 profit), 30% at $429 ($129) and 40% at $500 ($200). Pick the number that covers slow months and a bad job, then price every estimate with it.
How much does a 10% discount cost me?
More than 10% of your profit. On the $400 job with $100 of profit, a 10% discount takes $40 off the price and all of it comes out of profit: $60 left, a 16.7% margin instead of 25%. A 15% discount leaves $40. If you have to give something, take scope out instead of dollars.
Is a 30% markup the same as a 30% margin?
No. A 30% markup on $300 of cost is a $390 price with $90 profit, which is a 23.1% margin. A 30% margin on the same cost is $429 with $129 profit, a 42.9% markup. Pick one word, use it on every estimate, and let the calculator translate when someone else uses the other.
Is this a gross profit margin calculator or a net profit margin calculator?
It calculates job margin using the costs you enter. With direct costs only, that is gross margin. If you include overhead, it is the margin after that allocated overhead. Net margin is what's left across the whole business after every expense and tax, and that comes from your books, not a job calculator. Contribution margin, trading margin and Amazon fees are different tools.
Price your next job at the margin you meant.
Build the estimate in WinPal with your cost and margin on your side and a clean price on the customer's side. Estimates, invoices and payments live in the same app.