Define direct cost
Include the labour and materials you actually expect the job to consume. Do not mix sales tax into revenue or profit.
Contractor quote math · before tax
Markup is not margin.
A 50% markup does not create a 50% gross margin. Enter one quote, preview the discount, and see the difference before the number reaches a customer.
Quote inputs
Nothing is savedEnter non-negative amounts up to 1 trillion. Discount: 0–100%. Target margin: 0–99.9%. Blank or invalid inputs do not produce a result.
Quote math receipt
Live calculationBEFORE DISCOUNT
customer price less direct cost
Customer price—
Direct cost—
Gross profit—
Gross margin—
Markup on cost—
Discounted price—
Profit after discount—
Margin after discount—
Margin change—
Enter a price and direct cost.
Price for target margin—
Maximum discount at target—
gross margin = gross profit ÷ customer pricemarkup = gross profit ÷ direct cost
How to use the result
Price first. Discount second.
Read both percentages
Margin answers “what share of the customer price remains?” Markup answers “how much was added over direct cost?”
Preview the discount
Price falls while direct cost usually does not. Compare the new gross margin with the threshold you chose.
Check the target price
The target-margin price is a mathematical reference, not a recommendation. Your market, overhead and terms still matter.
| If direct cost is $100 | Customer price | Markup | Gross margin |
|---|---|---|---|
| 25% markup | $125 | 25% | 20% |
| 50% markup | $150 | 50% | 33.3% |
| 100% markup | $200 | 100% | 50% |
Why the numbers differ: markup uses the $100 cost as its denominator; margin uses the larger customer price.
This calculator does
Show estimating arithmetic for one proposed quote. Your entered figures stay in this browser page. They are not saved or included in example links. Refreshing restores the default or the fictional example named in the link.
This calculator does not
Set a profitable price, allocate overhead, calculate tax, replace bookkeeping, or confirm that a quote or discount is appropriate.
Plain-language answers
Margin questions
What is the difference between markup and gross margin?
Gross profit is customer price before tax minus direct cost. Markup divides that profit by direct cost. Gross margin divides it by the customer price. With a $150 price and $100 cost, profit is $50, markup is 50%, and margin is 33.3%.
Why can a 10% discount cut margin by more than 10%?
The discount comes entirely out of the price, while the labour and materials may be unchanged. On the sample $1,200 quote with $650 direct cost, a 10% discount changes price to $1,080 and profit from $550 to $430. Gross margin falls from 45.8% to 39.8%—a drop of 6 percentage points.
Does the calculator include overhead or take-home pay?
No. “Gross profit” here means price before tax minus the direct cost entered. It is not net profit or take-home pay. Rent, insurance, travel, admin time, tools, payment fees and income tax may still need to be covered.
Does it calculate sales tax or GST/HST?
No. Enter the customer price before tax. Sales tax is not treated as gross profit. You set and remain responsible for your own tax rates and compliance.
Is the target-margin price a recommended quote?
No. It is the price at which gross profit, divided by that price, equals the chosen gross-margin percentage. With zero direct cost, every positive price has 100% gross margin, so a lower target has no exact solution. It does not know your overhead, local market, minimum charge, scope risk, contract, tax obligations or business goals.
From practice math to real quotes
Run the numbers before send.
ScopeBid is an offline estimate and invoice app for independent service professionals. Its current listing says Profit Guard shows gross margin and markup side by side and previews a discount’s effect before a quote is sent. It also supports saved pricing, job costing, change orders, invoices and PDF quotes.
This calculator is an original web companion from Honest Little Apps, the publisher of ScopeBid. It is not a ScopeBid screen, does not connect to the app, and does not import or save quote records.