How do I calculate a selling price from target margin?

Divide total job cost by one minus the target margin expressed as a decimal. For example, $7,500 divided by 0.75 produces a $10,000 selling price at 25% margin.

Free contractor pricing tool

Turn project cost into a price that protects your margin.

Enter your total job cost and target gross margin. See the required selling price, expected gross profit, and equivalent markup instantly.

Total job cost Labor, materials, equipment, overhead allocated to the job

Target gross margin Profit as a percentage of the selling price

Required selling price$10,000

Gross profit$2,500

Equivalent markup33.3%

Gross margin check25.0%

Use this price in an estimate

Planning tool only. Confirm that your job cost includes labor burden, materials, equipment, subcontractors, permits, allocated overhead, and risk. Margin is not net profit.

Markup and margin are not the same

Markup measures profit against cost. Gross margin measures profit against the selling price. Confusing the two can quietly underprice work.

Target margin	Equivalent markup	Price on $10,000 cost
10%	11.1%	$11,111
20%	25.0%	$12,500
25%	33.3%	$13,333
30%	42.9%	$14,286
40%	66.7%	$16,667

Formula

Selling price = total job cost ÷ (1 − target margin)

For a $7,500 job cost and 25% target margin: $7,500 ÷ 0.75 = $10,000 selling price.

Build a complete job cost before applying margin

Field labor, payroll burden, and supervision
Materials, delivery, waste, and price volatility
Equipment, rentals, fuel, and disposal
Subcontractors, permits, and inspections
Allocated insurance, office, sales, and operating overhead
Contingency for conditions and execution risk

Contractor markup calculator FAQ

What is the difference between markup and margin?

Markup is profit divided by cost. Margin is profit divided by selling price. A 25% margin requires a 33.33% markup.

Does gross margin equal net profit?

No. Net profit remains after all business expenses, taxes, and other costs. This calculator only models gross profit based on the job cost you enter.

What margin should a contractor use?

There is no universal target. It depends on trade, overhead, risk, capacity, competition, scope, and business goals. Use your actual costs and financial plan.

Turn the price into a professional estimate.

Carry your calculated selling price into ScopeLark and add the real scope, customer, deposit, and terms.

Create the estimate