LoadingLoadingLoadingLoadingEnter the price you're charging and what the job costs you. We'll show you the gross profit, the gross margin (% of price), and the markup (% of cost) — the three numbers most trades businesses get muddled.
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Excluding VAT. VAT you charge is collected for HMRC, so it is never part of what the job earns.
What the job costs you. If you are VAT registered, exclude the VAT you can reclaim — it comes back, so counting it would overstate the cost. If you are not registered, or the VAT is not recoverable, it is money you do not get back: include it.
Tip: gross margin and markup are not the same. A 50% margin is a 100% markup. Most quoting software gets this wrong somewhere along the chain.
Gross profit
£400.00
Gross margin (% of price)
40%
The percentage of what you charge that's left after the job's direct costs.
Markup (% of cost)
66.67%
The percentage you add on top of the cost.
This is gross job margin, not your net profit margin. Enter the selling price excluding VAT — VAT you charge is collected on the customer's behalf and passed to HMRC, so it is never part of what a job earns. For costs, exclude the VAT you can reclaim and include the VAT you cannot: if you are not VAT registered, or the input tax is not recoverable, that VAT is a real cost of the job. The result reflects only the costs you enter: it does not carry the overheads that run whether or not you are working, nor finance costs or tax.
Turn this calculation into a branded quote in Cushty — price to a target margin and send it before you leave the drive.
See how quoting worksBoth percentages describe the same pound of gross profit. They just divide it by different things. Gross margin divides profit by the price the customer pays; markup divides it by what the job cost you. Because the price is always the bigger number, the margin is always the smaller percentage — and the gap widens as the numbers grow.
Gross profit = price − job cost Gross margin = gross profit ÷ price Markup = gross profit ÷ job cost
Same profit, two denominators. That is the whole difference — and the reason a healthy-sounding markup can still be a thin margin.
The figures the calculator opens with.
One job, one £400 gross profit, two very different percentages. If you told your accountant you made 66.7% and they were expecting margin, you're 27 points apart on the same job.
If you're working from a cost and a percentage rather than a finished price, start with the markup explainer.
A 50% margin is not the same as a 50% markup. The classic mistake: you want a 30% gross margin, so you add 30% to the cost. That gives you a 30% markup, which is only a 23% margin. By the time you've quoted ten jobs that way, the difference is real money.
Gross margin is profit expressed as a percentage of what the customer pays. Markup is profit expressed as a percentage of what the job cost you. They tell you different things, and using the wrong one in pricing decisions is one of the quieter sources of underearning in service businesses.
Calculators and generators we built for UK service businesses. All free, all in-browser, no signup.
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