Service Pricing Calculator
Calculate a service selling price from direct costs and your target gross margin. See gross profit, markup, the formula, and a worked example.
02 / YOUR RESULT
Start with your numbers.
The example calculates when this page loads.
How the calculation works
Price = direct cost / (1 - gross margin / 100). Gross profit = price - direct cost. Markup = gross profit / direct cost × 100.
A calculation you can check.
With $1,200 of direct costs and a 40% gross margin target, the required price is $2,000. Gross profit is $800. The corresponding markup is 66.7%, not 40%.
When to use this calculator
Use this service pricing calculator when preparing a fixed-price quote. Add the labor, materials, subcontractors, and other costs needed to deliver that specific job. Include a realistic allowance for delivery uncertainty in your cost estimate before calculating. Compare the resulting price with the scope and value of the work; this is a cost-based starting point, not a measurement of what a particular customer will pay.
Assumptions and limits
Gross margin is not take-home income. Gross profit must still cover overhead, financing costs, and other expenses. A cost estimate that omits delivery time produces a misleading price even when the formula is correct. Keep sales tax outside this model and use the break-even calculator to test whether the planned volume also covers fixed costs.
Before you use the result.
Is gross margin the same as markup?
No. Margin divides profit by selling price; markup divides profit by cost. A 40% markup on $1,200 gives $1,680, which has a 28.6% gross margin.
Can I enter a 100% gross margin?
Not with a positive cost. The denominator becomes zero, so no finite selling price can produce a 100% margin.
Should overhead be in direct cost?
Use a consistent accounting definition. This model treats direct delivery costs separately from overhead; do not count the same expense twice.
Calculator inputs are processed on your device and are not saved by this tool or sent to MNMVL. The optional CSV download includes your current inputs and result. These are simplified business planning models, not accounting, tax, or investment advice.