Profit Margin Calculator
Find your profit margin, markup percentage, and the price you need to charge to meet your goals.
Calculate Your Margin
Labor + materials + overhead
What the customer pays
Price by Target Margin
Know your cost? Enter your desired margin %, and we'll tell you what to charge.
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Profit Margin vs Markup: What's the Difference?
Profit Margin
The percentage of revenue that is profit. Formula: (Revenue - Cost) / Revenue × 100
Markup
The percentage added to cost to set the price. Formula: (Revenue - Cost) / Cost × 100
Industry Benchmarks
Frequently Asked Questions
What is a good profit margin for a service business?
Most service businesses should target a net profit margin of 15–30%. This varies by industry — cleaning businesses often see 25–45%, while HVAC and electrical typically range 15–25%. The key is to cover all costs (labor, materials, overhead, insurance) and still have enough to reinvest in growth.
How do I calculate markup from margin?
Markup = Margin / (1 - Margin). For example, if you want a 30% profit margin, your markup would be 30% / 70% = 42.9%. So if a job costs you $100, you'd charge $142.90.
Should I use margin or markup for pricing?
Profit margin is generally more useful for tracking business health since it tells you what percentage of each dollar earned is profit. Markup is more practical for day-to-day pricing since you apply it directly to your costs. Most successful service businesses track both.
How do I include overhead in my pricing?
Add up all your monthly overhead costs (rent, insurance, truck payments, software, phone, etc.) and divide by the number of billable hours you work per month. This gives you an hourly overhead rate to add to each job's direct costs before applying your markup.