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Markup vs. Margin — Know the Difference
Markup and margin are often confused. Markup is the percentage added ON TOP of your cost. A 50% markup on a $100 item = $150 selling price, and $50 profit. Margin (gross margin) is the profit as a percentage of the selling price. That same $50 profit on $150 = 33.3% margin.
Contractors typically mark up materials 15-30% and labor at a rate that covers overhead (tools, insurance, vehicle, etc.) plus profit. Most contractors price labor at 2-3x their direct labor cost to cover true overhead.