Markup math is simple once you separate cost, markup, price, and margin. The hard part is remembering every cost before you calculate.

Start with cost basis

Your cost basis includes labor, subcontractors, materials, software, travel, meetings, admin, QA, and risk. The margin leak checklist is a good pre-math review.

The SBA’s guide to calculating business costs is a useful reminder that overhead and setup costs still need to be recovered somewhere.

Use the markup formula

Price = Cost x (1 + Markup). If a design job costs $2,000 and you add a 50 percent markup, the price is $3,000.

Understand margin

Margin is profit divided by price. In the example above, profit is $1,000 and price is $3,000, so margin is 33 percent. That is why margin and markup are not the same.

Sample calculations

  • Consulting: $1,500 labor cost plus 60 percent markup equals $2,400.
  • Development: $6,000 cost plus 40 percent markup equals $8,400.
  • Contractor work: $3,200 materials and labor plus 35 percent markup equals $4,320.

Connect math to strategy

QuickBooks’ pricing strategy guide shows why cost-plus math is only one input. Value, competition, and positioning matter too.

Redistribute hidden internal costs

In ququ, you can add hidden internal items like admin, QA, and project management, then redistribute them into client-facing totals so the quote stays clean while the math stays honest.