Price the job
Contractor Pricing Calculator
Find the minimum profitable price that preserves your selected gross margin after payment-processing costs.
Pricing inputs
Minimum profitable price
Compare margin scenarios
The same true job cost at three target margins. A markup on cost is not the same as a margin on price, so the markup column shows what each price adds on top of your cost.
| Target margin | Price before tax | Expected profit | Markup on cost |
|---|---|---|---|
| 20% | $7,792 | $1,558 | 29.9% |
| 25% | $8,333 | $2,083 | 38.9% |
| 30% | $8,955 | $2,687 | 49.3% |
Markup is not margin
A markup is applied to your cost. A margin is measured against the price you charge. Adding 30% to a cost produces a 23.1% margin, not 30%, which is why a quote built on markup quietly returns less than intended.
| Markup on cost | Equivalent margin | Price on $6,000 |
|---|---|---|
| 10% | 9.1% | $6,600 |
| 15% | 13% | $6,900 |
| 20% | 16.7% | $7,200 |
| 25% | 20% | $7,500 |
| 30% | 23.1% | $7,800 |
| 35% | 25.9% | $8,100 |
| 40% | 28.6% | $8,400 |
| 50% | 33.3% | $9,000 |
| 67% | 40.1% | $10,020 |
| 100% | 50% | $12,000 |
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Continue to bid checkThe method behind these numbers
Markup vs margin: why 25% is not 25%
Markup is a percentage of cost. Margin is a percentage of price. The two produce different prices from the same cost, and confusing them is one of the most expensive arithmetic mistakes in contracting.
What this calculation tells you
Short answer. Contractor pricing starts from a completed job cost, not from a competitor's number. QuoteFormula calculates the minimum profitable price as true job cost divided by one minus the target margin and the payment-processing rate. Margin is a percentage of the selling price; markup is a percentage of cost, so adding 25% to cost produces a 20% margin, not 25%. The result is the lowest price that preserves the stated margin after a percentage-based processing fee. It is a floor, not a market price. Scope, risk, demand and the value delivered can justify charging more, while charging less requires an explicit decision about which assumption changes. Sales tax is added on top where it applies and is not margin. The calculator shows the price before tax and the processing fee separately, so the business can see what it keeps.
How this calculator works
The formula
minimum price before tax = true job cost ÷ (1 − target margin − payment-processing rate)How to use it
- Enter the true job cost from your completed estimate.
- Set the target gross margin as a percentage of selling price, not a markup added to cost.
- Enter the processing rate and optional tax rate, then compare the minimum price with the price you intend to quote.
Reading the result
The minimum price is a floor for the stated assumptions. A higher price can be justified by scope, risk or market value, but a lower price needs an explicit decision about which assumption is changing. Margin is not the same as markup.
Worked example
Illustrative example: a true job cost of $6,358.80 with a 25% target margin and a 3% processing rate is divided by 0.72. The minimum price before tax is $8,831.67; the processing fee and profit come out of that price.
Limitations
- Gross margin is a percentage of selling price. Adding 25% to cost is markup and produces a 20% margin.
- Sales tax is added on top when it applies; it is not revenue and should not be treated as margin.
- The result is a floor for your assumptions. Competitive, scope and risk factors still belong in the final quote.
Read the calculation methodology for the contracts behind every result or the full guide, Markup vs margin: why 25% is not 25%.
Frequently asked questions
- What is the difference between markup and margin?
- Markup is a percentage of cost. Margin is a percentage of selling price. Adding 25% to a $100 cost gives a $125 price, which is a 20% margin, not 25%.
- Why divide by one minus margin and the processing rate?
- The processing fee is a percentage of the selling price, not of cost. Dividing cost by (1 − margin − fee rate) solves for the price that leaves both the fee and the target margin after the sale.
- Is the minimum price the price I should charge?
- It is a floor for the assumptions entered. Scope, risk, demand and the value delivered can justify more. Charging less means deciding which assumption is changing: cost, margin or fee.