The calculator loads here when JavaScript is on. The examples below show how to do the sum by hand.
Price your materials
What you type stays in this browser tab. It isn't sent or saved anywhere.
Enter the cost and a percentage to see the price.
Markup and margin aren't the same
Both are your profit as a percentage, but of different things. Markup is the profit as a share of what the materials cost you. Margin is the profit as a share of the price the customer pays.
- Materials cost £400 and you charge £480. The profit is £80.
- Markup: £80 ÷ £400 = 20%
- Margin: £80 ÷ £480 = 16.67%
Mix them up and you earn less than you meant to. Someone who wants a 20% margin and adds 20% to the cost gets 16.67%. For a 20% margin, divide the cost by 0.8: £400 ÷ 0.8 = £500, which is a 25% markup.
| Markup on cost | Margin on price |
|---|---|
| 10% | 9.09% |
| 15% | 13.04% |
| 20% | 16.67% |
| 25% | 20% |
| 33.33% | 25% |
| 50% | 33.33% |
| 100% | 50% |
VAT on materials
- If you're VAT registered, you reclaim the VAT you paid at the merchant, so work from the price before VAT, add your markup, then add VAT for the customer. £400 + 20% = £480, plus £96 VAT = £576.
- If you're not registered, you can't reclaim the VAT, so it's part of your cost. Work from what you paid, VAT included, and don't add VAT to the customer's bill.
Not sure if you're near the threshold? The VAT threshold calculator checks your last 12 months.
What the markup pays for
There's no set markup for materials: it's your call, and it varies by trade and by job. Whatever you choose, it has to cover more than the receipt:
- the time spent choosing, ordering and collecting, and the fuel to the merchant
- offcuts, waste and the extra you buy to be safe
- returns, faulty items and the trip to swap them
- prices going up between the quote and the job
- paying the merchant before the customer pays you
If you'd rather show the materials at cost, put the time they take into your labour instead, so it's paid for somewhere. The pricing guide shows how materials fit into a whole quote, and a deposit can cover them on bigger jobs. Working for a contractor under CIS? The CIS calculator shows why materials go on their own line.
Line by line in Knockround
In Knockround, a quote goes out line by line, so the materials can sit on their own line next to the labour, and the customer taps Accept. When the job's done, the invoice has a Pay button for Apple Pay, Google Pay or card, so the money for the materials comes back on the day.
Try it on the jobs board demo, with made-up customers. It's free for 7 days with no card needed, then £19.99 a month.
Written by the Knockround team. The sums are plain arithmetic; VAT at the UK standard rate of 20%.