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Try QuoteSmith Free for 7 DaysMarkup is the percentage you add on top of your costs to arrive at your selling price. Getting your markup right is crucial -- too low and you won't cover your overheads, too high and you'll lose jobs to competitors. This guide explains how markup works and what percentages UK tradespeople should be using.
The markup formula is simple: Selling Price = Total Costs x (1 + Markup %). If your materials and labour cost £3,000 and you apply a 25% markup, your selling price is £3,000 x 1.25 = £3,750. Your profit is £750. Most tradespeople find this approach easier than working backwards from a target profit margin, because you start with what you know (your costs) and add on top.
This is where many tradespeople trip up. Markup and margin are not the same thing, and confusing the two leads to lower profits than expected.
A 25% markup only gives you a 20% profit margin. A 50% markup gives you a 33.3% margin. The table below shows common conversions:
| Markup % | Profit Margin % | Example (£1,000 cost) |
|---|---|---|
| 10% | 9.1% | Sell for £1,100, profit £100 |
| 15% | 13.0% | Sell for £1,150, profit £150 |
| 20% | 16.7% | Sell for £1,200, profit £200 |
| 25% | 20.0% | Sell for £1,250, profit £250 |
| 30% | 23.1% | Sell for £1,300, profit £300 |
| 40% | 28.6% | Sell for £1,400, profit £400 |
| 50% | 33.3% | Sell for £1,500, profit £500 |
The right markup depends on your trade, overheads, location and competition. Here are typical markup ranges for UK tradespeople:
| Trade | Typical Markup | Equivalent Margin | Notes |
|---|---|---|---|
| Builders | 15-25% | 13-20% | Higher material costs reduce percentage markup |
| Plumbers | 20-30% | 17-23% | Emergency work justifies higher markups |
| Electricians | 20-35% | 17-26% | Certifications add value, enabling higher markups |
| Roofers | 15-25% | 13-20% | Material-heavy jobs tend to have lower percentages |
| Kitchen Fitters | 20-30% | 17-23% | Specialist skills support higher markups |
| Landscapers | 20-30% | 17-23% | Seasonal demand affects pricing power |
Use tools like QuoteSmith to build proposals that automatically calculate markups and present professional pricing breakdowns to your customers.
Common questions about markup for tradespeople.
Markup is the percentage you add on top of your costs to arrive at your selling price. For example, if your total costs are £1,000 and you apply a 25% markup, you add £250 to get a selling price of £1,250. The markup covers your profit and helps account for overheads, risk and the value you bring to the job.
Markup is calculated as a percentage of your costs, while profit margin is calculated as a percentage of the selling price. For example, if costs are £1,000 and you sell for £1,250, your markup is 25% (£250 / £1,000) but your profit margin is 20% (£250 / £1,250). A 25% markup does not mean a 25% profit margin -- the margin will always be lower than the markup.
Recommended markups vary by trade. Builders typically use 15-25%, plumbers 20-30%, electricians 20-35%, roofers 15-25%, kitchen fitters 20-30%, and landscapers 20-30%. The right markup depends on your overheads, competition, location and the complexity of the work. Specialist or emergency work can justify higher markups.
To convert markup to margin, use the formula: Margin = Markup / (1 + Markup). For example, a 25% markup (0.25) gives a margin of 0.25 / 1.25 = 0.20 or 20%. To go the other way, Markup = Margin / (1 - Margin). A 20% margin (0.20) gives a markup of 0.20 / 0.80 = 0.25 or 25%.
Some tradespeople apply different markups to materials and labour. A common approach is 10-20% on materials (to cover sourcing and handling time) and a higher markup on labour to reflect your expertise and overheads. However, many tradespeople prefer a single overall markup on total costs for simplicity. Either approach works as long as your final selling price delivers a healthy profit margin.
Helpful articles and tools to complement your calculations
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