Three modes: calculate from cost + markup, from cost + sale price, or convert markup to margin. All calculations are ex-GST — the way you should be running your numbers.
Include materials, labour, subcontractors — everything ex-GST
Gross margin is the profit after direct job costs (materials and labour) but before overhead allocation, admin and tax. It's the most useful number for evaluating individual jobs. Net margin, after all overheads, is what actually determines if the business is viable.
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Markup is added on top of cost: Sale price = Cost × (1 + markup%). Margin is profit as a percentage of sale price: Margin = Profit / Sale price × 100. A 25% markup gives 20% margin. A 33% markup gives 24.8% margin. Use the Markup → Margin converter above to check any number instantly.
Most trade businesses should target 20–35% gross margin on jobs. Sole-trader licensed trades (plumber, electrician) should be at the higher end (25–35%) because overhead costs are higher relative to revenue. Below 15% gross margin is usually unsustainable once overheads are fully allocated.
No — always calculate margin on ex-GST figures. GST is collected on behalf of the ATO and isn't revenue. If you include it in your calculations, your margin will appear 10% higher than it actually is. All calculations in this tool are ex-GST.
Gross margin is revenue minus direct job costs (materials, labour, subcontractors). Net margin is what's left after all overheads — insurance, vehicle, admin, accounting, software. Gross margin is what you use to evaluate individual jobs. Net margin is what you use to evaluate whether the business is actually profitable.
To achieve 25% gross margin, apply a 33% markup: Sale price = Cost × 1.33. The formula is: Sale price = Cost / (1 - margin%). So for 25% margin: Cost / 0.75. For 30% margin: Cost / 0.70. The Markup → Margin tab in the calculator above converts any markup percentage to its equivalent margin.