What’s the difference between markup and margin?
Markup adds profit on top of cost, while margin measures profit within the final price.
Both markup and margin describe profit — they just answer different questions.
Markup answers: “How much profit am I adding on top of my cost?”
Margin answers: “How much of the final price do I actually keep as profit?”
Let's break down the math in simple terms:
Markup = profit ÷ cost
Margin = profit ÷ price you charge the customer
Same job. Same profit. Different math. An example:
Your cost is $100
You want $25 in profit
If you add $25 on top of the cost, that’s a 25% markup.You charge the customer $125. But your profit ($25) is only 20% of what the customer paid. That means your margin is 20%.
| Target Margin | Markup |
| 10% | ~11% |
| 20% | ~25% |
| 25% | ~33% |
| 30% | ~43% |
| 35% | ~54% |
| 40% | ~67% |
| 45% | ~82% |
| 50% | 100% |
How Beam thinks about this
Beam uses markup (right column) when calculating prices. What this means in practice is if you’re aiming for a specific profit margin on the job as a whole, you’ll need to set a higher markup to get there.