Profit Margin Calculator

Margin is profit as a percentage of the selling price (profit/selling price). Markup is profit as a percentage of the cost price (profit/cost). A 50% markup gives a 33.3% margin. A 100% markup gives a 50% margin. They are different ways of expressing the same profit.

As a rule of thumb, industry benchmarks for UK construction trades suggest a gross profit margin around 30-40% and a net margin (after all overheads) of roughly 10-20% for specialist trades, with 8-15% net common for general builders and contractors. The construction industry average net margin sits at about 5-10%. These are guideline figures, not a standard — a net margin below 10% leaves little room for slow periods or unexpected costs. Always price against your own actual costs.

Margin = Markup / (1 + Markup). For example, a 25% markup: 0.25 / 1.25 = 20% margin. Conversely, Markup = Margin / (1 - Margin). A 20% margin: 0.20 / 0.80 = 25% markup.

Either works, but be consistent. Margin is more useful for financial reporting as it shows profit as a share of revenue. Markup is often easier when pricing jobs as you simply add a percentage to your costs.

Include: vehicle costs, insurance, tools, admin time, phone/broadband, marketing, accountancy, training. These are the costs that eat into your gross profit. A job with 30% gross margin might only yield 15% net margin after overheads.