Guide

Markup vs. margin in construction

They sound interchangeable, they're not, and mixing them up quietly costs contractors real profit on every job. Here's the difference in plain terms.

The difference

Markup is what you add on top of your cost. Margin is the slice of the selling price that's actually profit. Same job, two different percentages.

Selling price = Cost × (1 + markup%)
Margin% = (Selling price − Cost) ÷ Selling price

The mistake that costs you

Say a driveway costs you $10,000 and you add a “25% markup.” You sell it for $12,500 — but your margin is only 20%, not 25%. If you actually wanted a 25% margin, you needed a 33.3% markup and a $13,333 price. Charge a markup thinking it's your margin, and you leave money on every single quote.

Target margin → the markup you need

If you want this margin	Add this markup
15%	17.6%
20%	25%
25%	33.3%
30%	42.9%
40%	66.7%

Formula: markup = margin ÷ (1 − margin).

How Estimora keeps you honest

You set your target margin once. Estimora prices every quote to hit it, shows where the number lands against the jobs you've actually won, and flags when you're bidding below your winning range — so you stop underpricing by accident.

Price every job to your real margin — automatically.

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