Service Business Profit Margin Calculator
Compute margin from cost and price, derive price from markup, or solve the price needed for a target margin. Trade-typical bands, no signup.
How this is calculated
Gross margin = (price − cost) ÷ price. Markup = (price − cost) ÷ cost. The two answer different questions; we show both so you can quote either way.
margin % = (price − cost) / price
markup % = (price − cost) / cost
required price = cost / (1 − target margin)
markup → margin = markup / (1 + markup)
margin → markup = margin / (1 − margin)
Example: cost $80, price $100 → margin
20%, markup 25%. To hit a 20% margin on a
$100 cost, charge $100 / (1 − 0.20) = $125.
Trade benchmarks are industry typicals (FieldRoutes, Profitability Partners, CleanerHQ, NextInsurance), not guarantees.
The cost figure you type in decides everything else, so it is worth being precise about what belongs in it: cost of goods sold draws the line, and gross margin defines the ratio this page returns. To convert between the two percentages on their own, the markup versus margin converter does nothing else.
A thin margin usually means one of two things went unpriced. Either the job was costed loosely, which the job cost quote calculator fixes line by line, or overhead never reached the quote at all, which is what the overhead recovery rate calculator exists to prevent.