Understanding your result
The headline is the price, and the sub-line gives the profit with both percentages. The three figures show the profit, the markup and the margin.
The table lists the cost, price, profit, markup and margin, then a conversion table for 10, 15, 20, 25, 30 and 40% margins and the markups that give them. Keep that table in mind when someone says “we work on 30%”: it matters which 30%.
Markup and margin are where a bid becomes a price. The bid builder uses a margin on the price and shows the matching markup; the paint cost calculator gives the materials cost a markup is applied to; and the painter cost estimator shows the range customers expect to pay.
How we calculate this
These are definitions, not estimates. The only judgement is which one your business targets; the bid guide works through the choice and shows how overhead fits between direct cost and price, and the painters’ charges guide sets the result against what customers see.
The assumptions behind the numbers
| Margin | Markup | Price on a $1,000 cost |
|---|---|---|
| 10% | 11.1% | $1,111 |
| 15% | 17.6% | $1,176 |
| 20% | 25% | $1,250 |
| 25% | 33.3% | $1,333 |
| 30% | 42.9% | $1,429 |
| 40% | 66.7% | $1,667 |
Assumptions last reviewed October 8, 2026.
The calculator does not include sales tax, which is collected on top of a price and is not profit, or overhead, which should be inside the cost before a margin is applied. The bid builder does both.
Two worked examples
A $1,000 cost at a 25% markup
- Price: $1,000 × 1.25 = $1,250
- Profit: $250; margin: 250 ÷ 1,250 = 20%
The same $1,250 is reached from a 20% margin: $1,000 ÷ 0.8. A cost of $800 against a price of $1,000 gives the same pair, 25% and 20%.
Working back from a price
A customer will pay $5,000 and you want a 30% margin.
- Cost allowed: $5,000 × 0.70 = $3,500
- Profit: $1,500; markup: 1,500 ÷ 3,500 = 42.9%
If the job cannot be done for $3,500 including overhead, the 30% margin is not available at that price.
Where to find your inputs
Cost. Everything the job costs you: labour at its burdened rate, materials, equipment and your share of overhead.
Markup or margin. Your pricing policy, or the figure in a quote you are checking.
Price. The quoted or agreed price, before tax.
Common mistakes
- Pricing a margin target as a markup. A 20% markup is only a 16.7% margin.
- Leaving overhead out of cost. The margin then has to pay for the truck.
- Including sales tax in the price. It is the state’s money.
- Comparing margins across businesses with different cost definitions. Ask what is in the cost.
- Applying a materials markup and calling it margin. They are different lines.
- Discounting a price without checking the margin left. A 10% discount on a 20% margin halves the profit.
Questions people ask
- What is the difference between markup and margin?
- Markup is profit divided by cost; margin is profit divided by price. A job that costs $1,000 and sells for $1,250 makes $250, which is a 25% markup and a 20% margin.
- How do I convert margin to markup?
- Markup = margin ÷ (1 − margin). A 20% margin is 0.2 ÷ 0.8 = 25% markup; a 30% margin is 42.9%; a 40% margin is 66.7%.
- How do I convert markup to margin?
- Margin = markup ÷ (1 + markup). A 25% markup is 0.25 ÷ 1.25 = 20% margin; a 50% markup is 33.3%; a 100% markup is 50%.
- Which should a painting contractor use?
- Either, consistently. Accounts and most business benchmarks report margin; many estimators add a markup because it is quicker. The danger is targeting a margin and pricing with the same percentage as a markup, which leaves money on every job.
- How do I find the cost from a price and a margin?
- Cost = price × (1 − margin). A $5,000 price at a 30% margin means a $3,500 cost and $1,500 of profit, a 42.9% markup.
- Can margin be over 100%?
- No. Margin is a share of the price and approaches 100% only as cost approaches zero. Markup has no upper limit; a 300% markup is a 75% margin.