CostHonest
Free instant estimates · Ontario market ranges

Markup is not margin — price the job properly

Punch in your cost on the job, the net margin you want to keep, the overhead the sale must recover, and a contingency for surprises. The calculator returns the price to quote and shows the arithmetic most estimators skip: to keep a 25% net margin on an $8,000 job — overhead recovered, 5% contingency held — you must quote $13,333, a 58.7% markup on cost. Quoting a 25% markup instead is where the money quietly leaks.

Common questions

What is the difference between markup and margin?

Markup is measured on cost; margin on the sale price. Marking an $8,000 job up 25% quotes $10,000 — but $2,000 on a $10,000 sale is only a 20% margin before overhead touches it. This calculator works backwards from the margin you keep, which is the number that pays you.

Why is the required markup so much higher than the margin?

Because margin, overhead and contingency all live inside the sale price. At the defaults, $8,000 of cost plus 5% contingency makes $8,400 of true cost; recovering $1,600 of overhead and keeping $3,333 of profit forces the quote to $13,333 — a 58.7% markup protecting a 25% margin.

What should the contingency be?

The slider runs 0–20% of cost, and the 5% default suits predictable work — demolition, weather exposure or old-building unknowns justify more. Contingency you did not spend becomes margin; contingency you did not price becomes loss.

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