Markup vs. margin

By James Grokman, CEO, TapeAndFloat · Updated 2026-10-29

Markup is the profit you add, measured as a percent of your job cost. Margin is the same profit measured as a percent of your bid price. Because the price is bigger than the cost, the same profit dollars always give a smaller margin than markup.

Why it matters on a drywall job

Mixing the two up can leave a bid short of the profit you meant to build in.
A GC, a lender or your bookkeeper may talk in margin while you price in markup. Check which one they mean before you compare numbers.
Overhead has to be covered somewhere. Decide whether it sits in your job cost or comes out of the markup, and stay consistent from bid to bid.

The math, in plain words

Profit = bid price − job cost.
Markup = profit ÷ job cost × 100.
Margin = profit ÷ bid price × 100.
Price from a markup = job cost × (1 + markup ÷ 100).
Price from a target margin = job cost ÷ (1 − margin ÷ 100).

EXAMPLE only (made-up numbers, not a suggested markup or margin): job cost $10,000 (EXAMPLE), bid price $12,500 (EXAMPLE). Profit = $12,500 − $10,000 = $2,500. Markup = $2,500 ÷ $10,000 = 25%. Margin = $2,500 ÷ $12,500 = 20%. Same job, same profit dollars, two different percents.

Run your own numbers with the free markup vs margin calculator. Nothing is pre-filled and nothing you type leaves your browser.

Frequently asked questions

Is a 20% markup the same as a 20% margin?

No. A 20% markup on cost works out to a margin of about 16.7% on price. To reach a 20% margin you need a 25% markup on cost.

Which one should I use to price a bid?

Either works if you do the math right. Many contractors price from cost with a markup and check the margin before they send the bid. What matters is knowing which one you are looking at.

Can margin be 100% or more?

No. Margin is a share of the price, so it has to stay under 100%. Markup has no such cap, because it is measured on cost.

Related guides and tools

TapeAndFloat helps drywall and tape-and-float contractors keep up with the office side: bids, change orders, pay apps and follow-ups. Free 60-day pilot. If you stay on, we agree on the price with you up front.

Join the free pilot

¿Prefiere español? Sobreprecio (markup) vs. margen.