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Profit Margin Calculator

Determine what to charge based on your target profit margin percentage.

To double-check project bids before you send them, use our profit margin calculator. It takes your job cost and target profit margin percentage to calculate the selling price, profit dollar amount, and markup percentage. It helps you see both your profit margin and your markup before you send out a bid.Track job costs and profit margins with Houzz Pro’s Financial Reporting tool. With real-time data, you can compare project budgets and actual costs so you can see each job’s profitability at a glance and compare your performance on each one.

How to calculate profit margin for construction projects

Profit margin is the percentage of the selling price that is profit. It’s calculated by dividing the profit on a job in dollars by the total revenue for that project.
Profit margin = Profit (in dollars) / Total revenue or selling price
Markup is the percentage added to project cost to determine selling price. The dollar amount is calculated by multiplying total costs by the markup percentage. The markup is then added to the costs to come up with the selling price. The markup percentage is calculated by dividing the job's profit by its total cost.
Markup = Profit (in dollars) / Total costs
Here’s an example to show how our profit margin calculator performs the selling price, profit, and markup percentage calculations:
  • Project cost: $15,000
  • Target profit margin: 20%
The results are:
  • Sale price: $18,750
  • Profit amount: $3,750
  • Markup: 25%
Markup and profit margin are not the same. As the example above shows, a 20% profit margin requires a 25% markup on costs. If you confuse the two, you’ll always be underpriced.Net profit margin after overhead expenses and taxes for residential contractors averages 8-12%.You should price by profit margin, not markup, when quoting against competitors who do the same. It’s a cleaner way to compare numbers.To calculate the selling price from job cost and markup percentage or determine your markup percentage from cost and sell price, use Houzz Pro’s Markup Calculator.

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