Contractor Markup Calculator
Add up materials, labor, and overhead, then set your markup or a target margin to get the bid price, profit, and the real margin behind it. Works in reverse too: enter a price and see the markup and margin baked in.
Your bid estimate
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Keep your bids in a spreadsheet you own
This calculator handles the quick math. The free Excel and Google Sheets version lets you save jobs, compare markup scenarios, and track materials, labor, overhead, and profit in one file. Want the full pricing toolkit? The Accounting & Finance bundle adds estimating, cash flow, and forecasting templates.
Markup vs margin (the gap that trips up contractors)
Markup and margin describe the same profit from two directions, and mixing them up is how a bid quietly loses money.
Markup is profit as a percent of your cost: markup % = (price - cost) / cost.
Margin is profit as a percent of your price: margin % = (price - cost) / price.
Price from markup: price = total job cost x (1 + markup %). Price from a target margin: price = total job cost / (1 - margin %).
Worked example. A job costs $8,000 all in ($4,000 materials, $3,000 labor, $1,000 overhead). Mark it up 25% and you bid $10,000, a $2,000 profit. That 25% markup is only a 20% margin. If you actually needed a 25% margin, you would bid $10,667, not $10,000. Same percentage, different number, real dollars on the line.
Markup to margin conversion
| Markup % | Equivalent margin % | Plain-English read |
|---|---|---|
| 10% | 9.1% | Thin add-on, materials pass-through |
| 15% | 13.0% | Common low-end trade markup |
| 20% | 16.7% | Standard cost-plus floor |
| 25% | 20.0% | Healthy contractor target |
| 35% | 25.9% | Upper end of typical trade markup |
| 50% | 33.3% | Strong margin, premium / specialty work |
Typical contractor markup by trade
There is no single right number. The markup that keeps you profitable depends on your overhead, the job size, and how much of the cost is materials versus labor. As a rule, general contractors run the thinnest margins because they do volume and spread overhead across many jobs, while labor-heavy, low-material trades like painting carry the highest markups. Use the ranges below as a starting point, then set your own number from your real overhead rate (next section).
| Trade | Typical markup | Typical net margin | Why |
|---|---|---|---|
| General contractor | 15–25% | 2–6% | Volume work, overhead spread thin; nets low single digits before tax |
| Electrical | 20–35% | 7–12% | Licensed, skilled labor with material risk |
| Plumbing | 20–35% | 8–12% | Skilled labor, emergency premium |
| HVAC | 20–35% | 8–12% | Equipment-heavy installs, service contracts |
| Painting | 30–45% | 10–15% | Labor-driven, low material cost, so margin needs a higher markup |
| Roofing | 25–40% | 8–15% | Most variable; commodity material swings and storm/insurance work |
| Remodeling | 20–35% | 10–20% | High overhead, scope uncertainty, change orders |
| Concrete | 15–25% | 5–10% | Material and equipment intensive |
| Drywall / interior finish | 20–30% | 5–8% | Competitive, labor-driven |
Ranges are typical industry figures from contractor pricing surveys and trade resources; treat them as starting points, not targets. Your right markup comes from your own overhead, below.
How to figure your real overhead rate
The fastest way to lose money on a profitable-looking bid is to guess your overhead. Here is how to get the real number in three steps:
1. Add up a year of costs that are not tied to any single job. Office and vehicles, insurance and bonding, software and tools, marketing, admin pay, and the value of your own time spent estimating and running the business.
2. Divide that by your total revenue for the same year. If you spent $120,000 on overhead on $600,000 of revenue, your overhead rate is 20%.
3. Recover that rate on every job before you add profit. Most contractors run an overhead rate of 25% to 50% of revenue, and it climbs as the business grows. A common trap for solo operators: if you do not pay yourself for office and estimating hours, your overhead looks artificially low and every bid is quietly underpriced. Put your real overhead into the overhead field above so the calculator builds it into the bid.
Should you mark up materials, labor, and subs the same?
Usually not, because each carries different risk. Many contractors use a differential markup:
| Cost type | Typical markup | Why |
|---|---|---|
| Materials | 7.5–20% | Lower for commodity pass-through, higher for specialty or price-volatile items |
| Labor | 25–50% | On top of the bare wage, to cover payroll burden, supervision, and profit |
| Subcontractors | 10–15% | Higher (15–20%) on high-risk scopes like structural or deep excavation |
This calculator uses one blended markup to keep things quick. If you bid with differential markups, run materials, labor, and subs separately and add the results.
The "10 and 10" rule
You will still hear about 10 and 10: add 10% for overhead and 10% for profit on top of direct costs, applied in sequence (cost x 1.10 x 1.10).
It survives mainly in insurance restoration work priced in Xactimate and in some large competitive commercial bids. The catch: 10% rarely covers real overhead anymore, since most contractors run 25% to 50%. Treat 10 and 10 as a historical baseline, not a target. If your real overhead rate is higher, and it probably is, use that instead.
Where do sales tax, permits, and contingency go?
These trip up a lot of bids. Practical handling:
Sales tax on materials. Fold it into your material cost so it is covered before you apply markup, not bolted on after.
Permits and fees. List them as a direct job cost. Most contractors pass these through with little or no markup, or a light markup to cover the handling.
Contingency. When scope is uncertain, add a contingency line, commonly 5% to 10% of cost, before markup, so surprises eat the contingency instead of your profit. You decide whether to show it to the client or fold it into the total.
Common bidding mistakes
Confusing markup with margin. The big one. A 25% markup is only a 20% margin.
Guessing overhead instead of calculating it. The number you skip is the one that sinks the job.
One flat markup on every job. Small jobs and risky scopes need more; large competitive bids need less.
Not pricing change orders. Scope creep without a change order is free work.
Never comparing estimated vs actual. If you do not check the real cost after the job, the same underpricing repeats on the next one.
Contractor markup FAQ
What is a typical contractor markup?
Most trades mark up materials, labor, and subcontractor costs 10% to 35% to cover overhead and profit. General contractors managing subs often land around 15% to 25%, while specialty or custom work can go higher.
Is markup the same as margin?
No. Markup is profit over cost; margin is profit over price. A 25% markup is only a 20% margin. Always confirm which one a client, GC, or estimator means before you commit to a number.
How do I price a job from total cost?
Add materials, labor, and overhead to get total job cost, then multiply by one plus your markup. An $8,000 job at 25% markup bids at $10,000.
Should overhead go in the cost or the markup?
Either works as long as you are consistent. This tool puts overhead into total job cost so your markup is pure profit on top. If you bury overhead inside markup instead, use a higher markup percentage.
What markup should a new contractor use?
Start by calculating your overhead rate and adding a target profit rather than copying a competitor. While you learn your real numbers, many new general contractors land around 20% to 25% markup, but that is a placeholder, not a rule. If your overhead is high, you will need more.
Why do painters have some of the highest markups?
Painting is labor-heavy with low material cost, so a healthy margin has to come from a higher markup on a smaller cost base. Trades with expensive materials can hit the same margin at a lower markup.
Should I mark up subcontractors the same as my own work?
Commonly 10% to 15%, and more on risky scopes. You are pricing the risk and the management you take on, not just passing the bill through.
Is a 20% markup enough?
Only if your overhead is low. A 20% markup is a 16.7% margin, and if overhead eats 25% to 40% of revenue, a 20% markup can lose money. Calculate your overhead rate before you trust any flat number.
What is the 10 and 10 rule?
Adding 10% for overhead and 10% for profit on top of direct costs. It is a traditional baseline that usually understates real overhead today, so use your actual overhead rate instead.
Why am I busy but not making money?
The classic sign of underpricing: markups that do not cover your true overhead. Calculate your overhead rate, compare it to what you have been charging, and reprice.
