Markup
Markup is profit measured against your cost — the percentage you add on top of cost to get your price.
A 20% markup on a $1,000 cost gives a $1,200 price. Markup is not the same as margin: that same $200 profit is only a 16.7% margin (profit as a share of price). Confusing the two is one of the most common ways contractors underprice work.
See also: Markup vs. margin calculator
Related terms
- Margin (gross margin) — Margin is profit measured against your price — the percentage of the sell price that's profit after costs.
- Gross profit — Gross profit is revenue minus the direct cost of the work (materials, labor, subs) — before overhead and other business expenses.
- Overhead — Overhead is the cost of running your business that isn't tied to one job — truck, tools, office, insurance, admin — recovered by adding it to every bid.