Business
How much markup should contractors charge?
Quick answer
Most residential contractors mark up jobs 35–50% to cover overhead and profit, but the right number depends on your own overhead rate and target profit — not an industry rule of thumb. Calculate it from your business, then confirm the resulting margin is high enough.
Definition
Markup is the percentage added to job cost to cover overhead and profit. It's set from your own numbers, and it always produces a smaller margin percentage than the markup itself.
Step by step
- 1Total your annual overhead and target profit.
- 2Express them as a percentage of your job costs.
- 3Apply that markup to each job's cost.
- 4Confirm the resulting margin meets your target.
Key takeaways
- Markup covers both overhead and profit.
- A 50% markup is only a 33% margin.
- Set it from your business, not a national average.
Related questions
- What is the difference between markup and margin?
- What profit margin should I target?
- Should I charge materials separately?
Frequently asked questions
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