---
title: What’s the difference between markup and margin?
description: Beam uses markup when calculating prices. If you’re aiming for a specific profit margin, you’ll need to set a slightly higher markup to get there.
---

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# 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.

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