HVAC
HVAC Markup vs Margin Calculator
Enter a cost and either a markup or a target margin. See the selling price, the gross profit, the true margin and the equivalent markup. Plus what a discount costs you.
Result
Markup is profit measured against cost; margin is profit measured against the selling price. They are never the same number above zero, and the gap widens as the percentage climbs. At a 50% target you need to double your cost, not add half of it.
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About this calculator
Is a 40% markup the same as a 40% margin?
No. A 40% markup on a $5,000 cost gives a $7,000 price and a 28.6% margin. To actually keep 40% you need a 66.7% markup, which prices the job at $8,333, $1,333 more gross profit on the same work.
How much does a discount really cost?
Far more than the headline. On a job priced at a 40% margin, every 1% off the price removes about 2.5% of the gross profit, so a 10% discount gives away a quarter of what you were going to make.
What margin should an HVAC company target?
There is no industry number worth copying. The right target is whatever covers your overhead and leaves the net profit you want: roughly (annual overhead + target net profit) ÷ annual revenue, run on your own P&L.
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Markup mistaken for margin costs a percentage point of profit on every job you price. The full article has the conversion chart, the discount maths and the audit to run on your own last ten jobs.