Add up materials, labor, and other costs, set the profit margin you want, and get the bid price — and the profit — for the job.
Margin is profit as a share of the BID (not cost) — the correct way to price so you actually keep that percent. Always cost your labor and materials honestly first. Estimate only.
Add your real costs, then divide by (1 − margin) to get a bid that leaves the profit you want. Dividing — not just adding a percent — is what makes the margin come out right; adding 25% to cost only yields a 20% margin.
Bid = total cost ÷ (1 − margin %) · Profit = bid − cost
Everything turns on which number the percentage is measured against. Margin is profit as a share of the bid — of what the customer pays you. Markup is the same profit as a share of your cost. If you want to keep a quarter of every dollar that comes in, you cannot get there by adding a quarter to what the job cost you, because the moment you add it the denominator grows too. The only way to land on a stated margin is to divide: bid = cost ÷ (1 − margin). This calculator does that, and reports the equivalent markup alongside so you can see exactly how far apart the two percentages sit.
The defaults are $1,200 of materials, $1,800 of labour and $300 of other costs — permits, a rental, fuel, a sub. Total cost is $1,200 + $1,800 + $300 = $3,300. At a 25% target margin the bid is $3,300 ÷ (1 − 0.25) = $3,300 ÷ 0.75 = $4,400. Profit is $4,400 − $3,300 = $1,100, and $1,100 ÷ $4,400 is 25% exactly, which is the check that the formula did what you asked. The equivalent markup is $1,100 ÷ $3,300 = 33.3% — you had to add a third to your cost to keep a quarter of the price.
Now price the same job the wrong way. Add 25% to cost: $3,300 × 1.25 = $4,125. Profit is $825, and $825 ÷ $4,125 = 20%. You asked for a 25% margin and got 20%, and the shortfall is $275 on one job. Run twenty of those in a year and you have given away $5,500 without ever noticing a bad day.
The margin you should target is not a universal number — it varies by trade, by region, by how much overhead the business carries and by how competitive the work is. What is reliable is the structure: the margin has to cover overhead (your truck, insurance, phone, the hours you spend quoting jobs you do not win) and leave profit on top, so a margin that only covers overhead is a break-even job wearing a profit label. Work out your annual overhead and your realistic billable hours first; that tells you the floor your margin cannot go below. As a rule of thumb, price riskier work higher rather than padding every job equally — an unfamiliar scope, an old building, or a client who has already changed their mind twice deserves a wider margin than repeat work you could do blindfolded.
The first is costing labour at the wage rate. What a crew member costs you is the wage plus payroll taxes, workers' compensation, insurance, paid time, and the hours that are on the clock but not on the job — loading, driving, the supply-house run. Depending on the trade and the jurisdiction that burden commonly adds somewhere between a fifth and a half again on top of the raw wage, so a labour figure taken straight from the payslip understates cost badly, and every margin calculated on top of it is fiction. The second is leaving the small direct costs out entirely: the disposal fee, the parking, the second trip for the fitting nobody measured. Individually trivial, they land squarely in the profit line. The third is quoting from a cost estimate you never check afterwards. If that $1,800 of labour actually comes in at $2,100, the real cost is $3,600 and the $4,400 bid you already gave delivers an 18.2% margin, not 25% — and you will only ever find that out if you compare estimated to actual once the job closes.
A calculator prices one job from numbers you already trust. It cannot tell you whether your labour burden is right, what your overhead per billable hour really is, or which of last quarter's jobs quietly lost money. Those questions need every job on a row with estimated cost, actual cost, bid and realised margin next to each other, so the pattern shows up before it becomes a year. That is the job our Small Business Bookkeeping template is built for, and it is the point where a spreadsheet stops being overhead and starts paying for itself.
Because margin is measured against the selling price. Adding 25% to cost gives only a 20% margin. Dividing by (1 − 0.25) gives a true 25% margin — the "equivalent markup" shows the difference.
Everything the job consumes: materials, labor (with burden), and other direct costs. Overhead and profit are what the margin adds on top.
Related: overhead & profit calculator · labor cost calculator · job estimate calculator · all free calculators.
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It uses standard formulas and recalculates the moment you change a value, so the math is exact for the inputs you enter. Treat the result as a reliable planning estimate; for decisions with legal or tax consequences, confirm the figures with a qualified professional.
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