Contractor Markup Calculator

Invoice = (material + labor) × (1 + markup %). Standard residential markup is 15-25%; remodeling 20-30%.

Inputs

New construction 15%, remodels 20%, design-build 25-30%.

Result

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General calculation reads

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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 vs. margin?+
Markup is added to cost (cost × 1.20 = price). Margin is share of revenue (margin / price). 20% markup = 16.7% margin.
Is 20% too high?+
No — that's residential standard. Overhead alone (insurance, truck, office, software) eats 12-18%; the rest is net profit.
How does this differ from time-and-materials?+
T&M passes through cost + a fixed % markup. Fixed-bid quotes bake in the markup but transfer overrun risk to the contractor.
Why higher on subs?+
Some GCs only mark up subs 10% (less coordination cost). Others apply full markup. Ask up front — it changes total significantly.
How do I verify markup is reasonable?+
Compare 3 line-itemized quotes. If one is 30% lower, they likely missed scope or undercount labor — you'll pay later in change orders.

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