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Markup vs margin calculator

Markup is added to cost. Margin is the share of the selling price left after that cost. They are related, but they are not the same percentage.

Enter your figures

Results update as you type. Amounts are planning inputs and are not stored by Qwotly.

Calculated result

Use this as a commercial check

Selling price£1,300.00The net price before VAT.Gross profit£300.00Selling price less the entered job cost.Gross margin23.1%Gross profit as a percentage of selling price.

Formula

Selling price = cost × (1 + markup ÷ 100). Gross margin = (selling price - cost) ÷ selling price × 100.

Worked example

If a job costs £1,000 and you add 30% markup, the net selling price is £1,300. Gross profit is £300 and gross margin is 23.1%, not 30%.

Reviewed for UK trade use

Written by the Qwotly product team. Last reviewed 26 July 2026. Educational guidance only, not accounting, tax or legal advice.

A safer way to use the result

  1. 1Build the job cost from evidence, quantities, labour and supplier prices.
  2. 2Choose a markup that reflects overhead recovery, risk and the required gross profit.
  3. 3Check the resulting margin before sending the quote.
  4. 4Keep the calculation with the quote so revisions can be assessed consistently.

Common mistakes

  • Treating a 30% markup as a 30% gross margin.
  • Leaving travel, waste, hire, subcontractor or disposal costs out of the job cost.
  • Calculating margin after VAT even though VAT is normally collected for HMRC.
  • Using one markup for every risk level without checking the actual scope.

Questions tradespeople ask

What is the difference between markup and margin?

Markup measures profit against cost. Margin measures gross profit against the selling price. A 25% markup produces a 20% gross margin.

Should VAT be included in the markup calculation?

Businesses normally calculate markup and gross margin on net amounts before VAT. VAT treatment depends on registration and the supply, so confirm uncertain cases with a qualified accountant.

What markup should a tradesperson use?

There is no universal rate. It must cover the real job cost, business overheads, risk and required profit while remaining commercially sensible for the work.

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