Margin uses the selling price
Gross margin is gross profit divided by price. It answers what share of revenue remains after the included job costs.
Free pricing tool
Margin and markup calculator
Price from a target gross margin without treating margin and markup as if they were the same percentage.
Required price$3,589.74Cost ÷ (1 − margin)
Expected gross profit$789.74
Equivalent markup28.2%Profit ÷ cost
Formula
required price = total cost ÷ (1 − target gross margin)Markup uses the cost
Markup is gross profit divided by cost. A 25% margin requires a 33.3% markup, so swapping the terms can materially underprice a job.
Define the cost first
A target margin protects nothing when payroll burden, supplies, travel, equipment, callbacks, or overhead are missing from total cost.