Markup vs Margin for Contractors - Same Job, Different Denominator

On a jobsite, people say “we mark up 25%” and hear “25% profit.” That mix-up is how bids look fine on paper and break even in the bank. Markup divides by cost. Margin divides by the selling price (the bid).

The same job, two percentages

Cost $10,000 with a 25% markup is a $12,500 bid. Profit is $2,500 — that is a 20% margin, not 25%. Keystone (100% markup) is a 50% margin. Convert either way with the contractor markup vs margin calculator.

Where to apply it on a bid

Build direct cost first, recover overhead, then decide whether profit language is markup or margin — and stick to one. The contractor markup calculator and construction profit margin calculator show both numbers so a percentage cannot hide the real bid.

What this guide is not

Not a licensed estimate and not accounting advice. Typical range talk (often roughly 15–35% markup on direct cost) is context, not a market rate for your trade or city.