Margin uses price; markup uses cost
With 100 in included costs and a selling price of 130, contribution is 30. Margin is 30 ÷ 130 = 23.08%. Markup is 30 ÷ 100 = 30%. Adding a 30% markup therefore does not produce a 30% margin.
Calculate a price from a margin target
Divide cost by one minus the target margin as a fraction. At a 30% target, 100 ÷ 0.70 = 142.857…. Displayed currency is rounded to two decimal places; the tool calculates using unrounded numbers.
Interpret zero and negative results
When price is zero, margin has no defined denominator. When cost is zero, markup is undefined. A price below cost produces a negative contribution. A target of 100% cannot be used with the target-price formula.
Keep the cost scope consistent
Include owner labor, overhead and other expenses deliberately. This calculator does not certify a net profit or a suitable market price. Read the worked discount example and use the actual job comparison to review results after a visit.