Job costs
Price to quote
Total cost
Profit
Margin (profit ÷ price)
Markup (profit ÷ cost)
Margin vs. markup
Margin is profit as a share of the price. Markup is profit as a share of cost. A 30% markup only gives a 23% margin — the most common quoting mistake.
| Target margin | Markup needed | Price on your cost |
|---|
- Labor cost = hours × your labor cost rate (what the labor costs you, including your own pay).
- Direct cost = materials + labor + other job costs (dump fees, permits, rentals).
- Overhead = direct cost × overhead % (insurance, truck, phone, software, unbilled time). 10–20% is typical for owner-operators.
- Price = total cost ÷ (1 − margin). Profit = price − total cost.
- Markup % = margin ÷ (1 − margin). Sales tax not included.