Price a job from your materials and labour, then see the number that actually matters: your real profit margin. It catches the mistake that quietly costs trades money, adding a markup and assuming it's your margin.
A 30% markup feels like a 30% profit, but it isn't. Change the markup and watch the real margin. To hit a target margin, use the conversion table below.
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This is the single most common pricing mistake in the trades, and it quietly costs real money. Markup is the percentage you add on top of your cost. Margin is the percentage of the final price that is actually profit. Because markup is measured against your cost and margin against your (higher) selling price, the margin is always the smaller number.
Add 20% markup to a £1,000 job and you charge £1,200, a £200 profit. But £200 out of £1,200 is a 16.7% margin, not 20%. If you were aiming to keep 20% of the job, you've just under-charged. Do that on every quote and it adds up to a serious hole over a year.
| If you want this margin | Add this markup |
|---|---|
| 10% | 11.1% |
| 20% | 25% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100% |
So to genuinely keep a third of a job (a 30% margin), you need to add nearly 43% on top of your costs, not 30%.
The price this tool gives is before VAT. If you're VAT registered you add 20% on top for the customer (the calculator shows it). And remember your "cost" should include a fair rate for your own time and a share of overheads (van, tools, insurance, admin), not just materials and a mate's day rate, otherwise the margin is thinner than it looks.
No. A 50% markup gives a 33% margin. The markup is measured against cost, the margin against the higher selling price, so the margin is always lower.
Most trades think in markup because it's easy to add a percentage to a cost. That's fine, as long as you know the real margin it leaves you and that it covers your overheads and your time. This tool shows you both.
After. Work out your price with your markup first, then add VAT (currently 20%) on top if you're registered. VAT is the customer's tax, not your profit.
A free tool for general guidance, not financial advice. Make sure your cost figures include your own time and a share of overheads before you rely on the margin.
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