Margin and markup are different.

Margin and markup are two ways to compare profit with your costs or selling price.

Markup starts with cost.

Markup is profit divided by cost. If a job costs $100 and you add 20%, the selling price is $120 and the profit is $20. That is a 20% markup.

Margin starts with the selling price.

Margin is profit divided by revenue. On that same $120 job, $20 ÷ $120 = 16.7%. A 20% markup therefore produces about a 16.7% margin before any additional fees.

Payment fees change the equation.

If your payment provider charges 3% of the selling price, and your cost is still $100, the price for a 20% margin becomes $100 ÷ (1 − 0.03 − 0.20) = approximately $129.87. If there is also a fixed payment fee, add it to the $100 cost before dividing.

Decide what belongs in “cost.”

If you detail vehicles yourself, include your pay, supplies, travel and a share of business expenses in the job cost. Otherwise a number labeled “profit” may still need to pay you for the hours you worked.

A target margin is not a guarantee.

The calculator suggests a price using your costs and target margin. You still need to check whether that price fits the work and your local market. Extra cleaning time, discounts, missed costs and fees can reduce the final profit.

Examples use USD and exclude sales tax, income tax, and unlisted costs. Rounding a price up may slightly increase the resulting margin.