Construction margin calculator

Calculate markup, margin, and bid pricing for contracting jobs. Industry benchmarks for general contractors, subs, and trades.

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Margin
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Markup
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Construction margin calculator benchmarks

GC typical markup
10-20%
Specialty trade markup
20-50%
Industry net margin
5-15%
Equivalent margin (20% markup)
16.7%

Contractors live and die by markup discipline. The industry-standard mistake — applying a 20% markup and thinking you have a 20% margin — leaves money on the table on every job. A 20% markup is actually a 16.7% margin; to hit a true 20% margin you need 25% markup.

Markup by trade

TradeTypical markupEquivalent margin
General contractor10-20%9-17%
Electrician30-50%23-33%
Plumber30-50%23-33%
HVAC25-40%20-29%
Painting30-60%23-38%
Roofing25-50%20-33%
Specialty/custom40-100%29-50%

Materials vs labor markup

Many contractors apply different markups to materials and labor. Materials typically carry 15-35% markup (covering procurement, returns, financing). Labor often carries 50-100% markup because that's what covers overhead — insurance, vehicles, office, downtime, and the contractor's own draw.

The 10% markup myth
"I add 10% for profit" is the most expensive sentence in residential construction. A 10% markup yields a 9.09% gross margin — and after overhead, that's a net loss on most jobs. Real-world overhead in small construction businesses runs 15-25% of revenue, so 10% markup is structurally unprofitable.

Frequently asked

What's the difference between markup and margin in construction?

Markup is what you add to your costs. Margin is the percentage of the final bid that's profit. They are not equal — and the construction industry has a long history of confusing them, to the detriment of contractors. A 20% markup is only a 16.7% margin.

How much markup should a general contractor use?

10-20% is the standard range, but it must cover overhead first, then profit. Many GCs need 25-30% just to break even after office, insurance, and vehicle costs. Use the calculator above to back into the real number.

Should overhead be a markup or a separate line?

Both approaches work, but you must include it. The bid must cover: direct costs + overhead allocation + profit. Whether overhead shows on the customer invoice as a line item or is buried in the markup, it has to be in there or the job is unprofitable.

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