Margin and markup answer different questions
Profit margin tells you what share of the selling price remains after the costs included in your estimate. Markup tells you how much profit you added compared with cost. The percentages are not interchangeable.
Markup = profit ÷ cost
This matters when pricing recurring cleaning work because adding 30% to cost does not create a 30% margin.
Free quote check · no registration
Check the margin on your quote
Use the total cost and customer price for the same visit, before tax. Include the costs you want counted, using the same currency for both amounts.
Your entries stay on this page. Nothing is saved or sent.
The same $140 cost priced two ways
Using a 30% markup
Profit is $42. That $42 is 30% of the $140 cost, but only about 23.08% of the $182 selling price.
Using a 30% target margin
Profit is $60. That $60 is 30% of the $200 selling price, so this is the price that achieves a 30% margin on the costs entered.
Convert between markup and margin
Markup = margin ÷ (1 − margin)
A 30% markup is about a 23.08% margin. A 30% margin requires about a 42.86% markup on cost. The conversion does not tell you which target is right for a particular job; it only keeps the arithmetic consistent.
Use one definition across the team
Write down whether estimates, reports, and pricing discussions use margin or markup. If an owner, estimator, and bookkeeper use the same word for different formulas, a quote can look profitable while missing the intended target.
- Label the target field clearly as margin or markup.
- Show the formula beside spreadsheets and calculators.
- Keep the same cost categories in the estimate and later job review.
- Compare estimated labour and cost with actual results after service begins.
What this calculation does not decide
A margin formula does not set a market price, predict the actual hours, or guarantee profit. The result depends on the scope and costs entered. Confirm the work, facility conditions, service frequency, exclusions, and operational risk before sending a bid.