Gross Profit Margin Calculator
Calculate your gross profit margin instantly
See What This Job Is Actually Worth
Use the gross profit margin calculator below to work out your margin or markup on a job, a fee, or a single task or disbursement. Enter what something costs you and what you’re charging for it, and it will show you the difference both as a cash amount and as a percentage, split by labour and disbursements so you can see where a job’s profitability is actually coming from.
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Calculate your Gross Margin/Markup below
What is...
What Is Margin?
Margin, also called gross profit margin, is the percentage of your sale price that is profit. To calculate margin, divide your profit by your sale price, not your cost, so that same £500 cost sold for £750 gives you a margin of 33.3% (£250 profit out of a £750 fee), not the 50% markup figure above. Margin vs markup catches most people out at quoting stage. Margin is the number that tells you what proportion of the money coming in is actually yours to keep.
Read more by Xero here
What Is Markup?
Markup is the percentage you add to your cost price to arrive at your sale price. To calculate markup, divide your profit by your cost, not your sale price, so a task that costs you £500 and is marked up by 50% sells for £750. Markup tells you how much you’ve added on top of what something cost you, and it’s easy to confuse with margin because the two numbers look similar but answer different questions.
pros & cons
See Your Margin on Every Job, Not Just This One
Getting the margin right on one job is straightforward with a calculator. Getting it right across every task, disbursement and sub-consultant fee on every live job, before it’s too late to correct, is the harder problem, and it’s the one most architecture, surveying and planning practices are still solving with spreadsheets rather than an architect fee calculator built into their systems.
Hyphen Digital builds project management systems for firms in the built environment that give you that visibility in real time, so you know which jobs are quietly eroding margin while they’re still running rather than finding out at invoice stage. If margin tracking is currently a manual job at your practice, get in touch and we’ll show you what it looks like automated.
questions?
Frequently asked questions
What's the difference between margin and markup?
Margin is your profit as a percentage of what you charged. Markup is your profit as a percentage of what something cost you. Because the two percentages are calculated on different bases (fee versus cost), they will always differ on the same job, except when profit is zero.
A wide gap between the two figures is normal. It reflects how each term is defined, not an error in your numbers. Use margin when you want to know what proportion of your fee income is actually profit. Use markup when you’re working out how much to add to a cost price before you quote it.
What is a good profit margin?
There’s no single figure that applies across every business, so treat any generic rule of thumb with caution.
What counts as healthy depends on your overheads, how much of your team’s time is billable, and how your sector typically prices work. A margin that looks thin next to a retail business can be entirely normal for a professional services firm carrying salaried staff and fixed overheads across every job.
The more useful exercise is tracking your own margin job by job and watching the trend, rather than measuring yourself against a number pulled from outside your business.
What is a good profit margin for a small business?
Size on its own doesn’t determine what margin you should be aiming for. Your cost structure does. A small practice with low overheads can run a healthy business on a margin that would be dangerously thin for a firm carrying more fixed costs, and the reverse is also true.
Rather than borrowing a benchmark built for a different size or type of business, work out what margin actually covers your overheads and leaves a sustainable profit, then use that as your own target.
How do I calculate margin and markup on a quote?
For margin, divide your profit by your sale price (the fee you’re charging) and multiply by 100. For markup, divide the same profit by your cost and multiply by 100.
Profit is identical in both calculations (sale price minus cost); only what you divide it by changes.
If you’re pricing a quote from a target margin rather than checking one after the fact, work backwards: sale price = cost ÷ (1 − target margin as a decimal).
What's the best calculator for working out margin on professional service fees?
It depends on how you actually quote work.
Most generic margin calculators assume a single cost and a single price, which suits retail or product pricing well but fits services work poorly, because a professional fee is rarely one lump sum. It’s usually a mix of billable labour and pass-through costs like disbursements or sub-consultant fees, each carrying a different margin.
The calculator on this page is built around that split, so you can see labour margin and disbursement margin separately rather than one blended number that hides where a job is actually losing money.
If you’re checking margin on a single quote, this is the right tool for it. If you want that same visibility live across every job your practice is running, that’s a different problem, and it’s the one Hyphen Digital builds project management systems to solve.