Price the work with the margin visible.

Price from direct cost, then check the margin.

Gross margin answers a different question than markup. Gross profit is your sell price minus direct job costs. Gross margin expresses that gross profit as a percentage of the sell price. Markup expresses gross profit as a percentage of direct cost. Mixing those two percentages is a common reason a quote can look profitable while producing less gross profit than expected.

Enter the selling price you are considering, then include the direct costs that move with the job: field labor, materials, subcontractors, disposal, permits, freight, or other job-specific costs. The calculator shows the remaining gross profit, gross margin, and markup on direct cost so you can compare pricing scenarios before sending the quote.

Example

If a service sells for $5,000 and the direct costs total $3,200, gross profit is $1,800. That is a 36% gross margin because $1,800 is 36% of the $5,000 sell price. The same job has a 56.3% markup on direct cost because $1,800 is 56.3% of $3,200. Neither number includes overhead or net profit.

What to include

• Labor: wages or direct labor cost attributable to the job.
• Materials: materials consumed to complete the work.
• Subcontractors: outside labor or specialty trades billed to the job.
• Other direct cost: job-specific expenses such as disposal, rentals, delivery, permits, or travel when they are directly tied to that job.

Use the output as a pricing check, then compare it with your company’s actual overhead, commission structure, warranty exposure, financing cost, and target profitability before finalizing a price.