Markup Calculator
Markup is the percentage added to a cost to create a selling price. Trades use it to recover the time and risk involved in sourcing materials, managing subcontractors and delivering a guaranteed result. The right markup starts with a complete, accurate cost.
Key pricing factors
True Cost
Start with the complete purchase or delivery cost, including supplier delivery, collection time, wastage and card charges.
Markup Percentage
Multiply cost by the chosen percentage to calculate the cash added. Different cost types may justify different markups.
Selling Price
Add the markup amount to cost. If VAT registered, calculate VAT after establishing the net selling price.
Risk & Responsibility
Markup compensates the business for selecting, transporting and standing behind supplied materials or managed work.
Example: Materials Markup
- Supplier materials cost
- £400.00
- Markup at 20%
- £80.00
- Selling price before VAT
- £480.00
Adding a 20% markup to £400 creates an £80 contribution and a £480 net selling price. This equates to a 16.7% profit margin.
Practical quoting guidance
- Explain the value of supplied materials through guarantees, correct specification and convenience rather than presenting markup as a hidden fee.
- Apply markup to the landed cost, including delivery and unavoidable wastage, not only the supplier shelf price.
- Do not rely on materials markup to rescue an underpriced labour estimate.
Frequently asked questions
How do I calculate a 20% markup?
Multiply the cost by 0.20 to find the markup amount, then add it to the cost. A £400 cost becomes £480 before VAT.
Is 20% markup the same as 20% margin?
No. A 20% markup on cost gives a 16.7% margin on the selling price. To achieve a 20% margin, the equivalent markup is 25%.
Should tradespeople markup materials?
A reasonable markup can cover ordering, collection, delivery, wastage, finance and warranty responsibility. It should reflect the service and risk involved.