Free tool
Contractor estimate & markup calculator
Enter your materials, labor, overhead, and markup — get the price to quote and, just as important, the gross margin your markup actually produces. No signup, no email. Everything runs in your browser.
Job costs
Markups
Your estimate
Markup is not margin
A 35% markup on your cost gives you a 25.9% gross margin — not 35%. Margin is profit as a share of the price; markup is profit as a share of your cost. To actually keep 35% margin, you'd need a 54% markup. Confusing the two is the most common way contractors underprice.
How to price a contracting job (the honest version)
Every profitable quote is built the same way, in this order — and the order matters, because applying markup before overhead (or confusing markup with margin) is how crews end up busy and broke.
- Direct cost. Materials + (labor hours × loaded labor rate) + equipment/subs. This is what the job physically costs you.
- Overhead. Add a percentage that covers the costs no single job pays for — office, trucks, insurance, software, admin. Total your yearly overhead, divide by your yearly job costs, and that's your overhead rate.
- Markup. Add your markup on top of the cost basis. This is your profit.
- Check the margin. Convert the markup to a margin and make sure it's the number you actually need to take home.
Markup vs. margin — the mistake that quietly kills contractors
This is the single most expensive misunderstanding in the trades. Markup is profit measured against your cost. Margin is profit measured against the price. They are always different numbers:
- A 20% markup = ~16.7% margin
- A 35% markup = ~25.9% margin
- A 50% markup = ~33.3% margin
To earn a target margin, use: markup% = margin% ÷ (100 − margin%) × 100. A contractor who wants a 40% margin needs a 67% markup, not 40%. Quote a 40% markup thinking it's a 40% margin and you've left roughly 12 points of profit on every job. Over a year, that's the difference between growing and folding.
FAQ
How do you calculate a contractor job estimate?
Add your direct costs (materials + labor hours × rate + equipment/subs), add overhead as a percentage of those direct costs, then apply your markup on top. That gives the price you quote. The calculator on this page does it live and also shows the gross margin your markup actually produces.
What is the difference between markup and margin?
Markup is your profit as a percentage of cost; margin is your profit as a percentage of the price you charge. They are not the same number. A 35% markup produces about a 26% gross margin — not 35%. Contractors who quote a "35% margin" using a 35% markup are underpricing every job.
What markup should a contractor use?
It depends on trade, risk, and overhead, but many residential trades target a 30–50% markup, which lands roughly in the 23–33% gross-margin range. The right number is whatever covers your overhead and leaves the net profit you need — use the calculator to work backward from a target margin.
What should be included in overhead?
Overhead is every cost not tied to one specific job: office rent, trucks and fuel, insurance, software, admin/office salaries, tools, and marketing. Total it for the year, divide by your expected job costs for the year, and that percentage is what you add on top of each job's direct cost.
Turn the estimate into a real quote
This calculator does the math. Vexor turns it into a line-item quote with e-signature that flows straight into a scheduled job — plus photos, time tracking, and invoicing, flat at $99/$199/mo with no per-seat fees. Free for 30 days.