Contractor Markup Calculator
Invoice = (material + labor) × (1 + markup %). Standard residential markup is 15-25%; remodeling 20-30%.
Result
Invoice total
$19,200
Cost $16,000 + 20% markup.
- Materials$8,000
- Labor$6,000
- Subcontractors$2,000
- Total cost$16,000
- Markup$3,200
- Invoice$19,200
- Gross margin %Of invoice — different from markup of cost.16.7%
Step-by-step
- Cost = 8000 + 6000 + 2000 = $16,000.
- Markup = 16,000 × 0.2 = $3,200.
- Invoice = cost + markup = $19,200.
How to use this calculator
- Enter material, labor, and sub costs separately.
- Enter markup percent — 20% is the residential default.
- Compare invoice vs. competing quotes.
- Note margin % — what the contractor actually earns.
About this calculator
Markup ≠ margin. Markup is added to cost (cost × 1.20 = invoice with 20% markup). Margin is what comes out of the invoice (20% markup = 16.7% gross margin). General contractors typically need 20-30% markup just to cover overhead (insurance, vehicles, office) and leave 5-10% net profit. New construction is leaner (15-20%); design-build remodelers run 25-35%. If a quote shows "0% markup" or you're buying at "cost," you're either being misled or the contractor is going broke.
Frequently asked
Markup is added to cost (cost × 1.20 = price). Margin is share of revenue (margin / price). 20% markup = 16.7% margin.
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