A 30% markup is not a 30% margin.
Both numbers compare price with cost, but they use different denominators. Mixing them up changes how much remains after the job.
| For a $100 job cost | Calculation | Price |
|---|---|---|
| 30% markup | 100 × 1.30 | $130.00 |
| 30% margin | 100 ÷ 0.70 | $142.86 |
At a $130 price, the $30 surplus is about 23.1% of revenue. At $142.86, the $42.86 surplus is about 30% of revenue. Neither example includes processing fees.
Add payment costs
Use rates as decimals: 30% becomes 0.30. For $100 of costs, a $0.30 fixed fee, 3% processing, 10% tax added and a 20% margin: price = 100.30 ÷ 0.767 = about $130.77 before tax.
The processing assumption matters: this model charges the fee on the entire payment, including added tax. Sales tax is excluded from revenue when calculating the margin.
A calculated price is not a market promise
The formula shows what your assumptions require. It cannot tell you whether the customer will accept the price, whether the time estimate is realistic, or whether every business cost was included.