Margin and markup both describe profit, but they're calculated from different starting points and produce different percentages for the same job. Mixing them up is one of the more common reasons a commercial cleaning quote ends up less profitable than the business owner intended.
This guide walks through the difference in plain English, with worked examples using an estimated job cost and a proposed selling price.
Gross profit: the starting point
Gross profit is simply the dollar amount left over once you subtract your estimated cost from your selling price:
Gross Profit = Selling Price − Cost
Both margin and markup are just this same dollar figure expressed as a percentage — the difference is what you divide it by.
What margin means
Margin expresses profit as a percentage of your selling price:
Margin % = (Selling Price − Cost) ÷ Selling Price × 100
Margin answers the question: "Of every dollar a client pays me, how much is profit?"
What markup means
Markup expresses profit as a percentage of your cost:
Markup % = (Selling Price − Cost) ÷ Cost × 100
Markup answers a different question: "How much have I added on top of what this job costs me?"
Worked example (Example Only)
Say your estimated cost for a visit — labour, supplies, equipment, overhead allocation — comes to $420, and you propose a selling price of $600.
| Figure | Calculation | Result |
|---|---|---|
| Gross profit | $600 − $420 | $180 |
| Margin | $180 ÷ $600 × 100 | 30% |
| Markup | $180 ÷ $420 × 100 | 42.9% |
Same job, same $180 profit — but a 30% margin and a 42.9% markup. Neither number is wrong; they're just answering different questions.
Why 30% markup does not equal 30% margin
This is where quotes go wrong. If you take your $420 cost and add a 30% markup instead of aiming for a 30% margin, you get a very different selling price:
| Approach | Calculation | Selling price | Actual margin |
|---|---|---|---|
| 30% markup on cost | $420 × 1.30 | $546 | 23.1% |
| 30% margin (target) | $420 ÷ (1 − 0.30) | $600 | 30% |
A cleaner who thinks they're pricing at "30%" but is actually applying a 30% markup has quietly priced the job at a 23.1% margin instead — a real difference once it's repeated across dozens of jobs and multiplied by visit frequency over a year.
Markup to margin — a quick reference
Because the two scales aren't linear, it helps to see a few common markup percentages converted to their equivalent margin:
| Markup % | Equivalent margin % |
|---|---|
| 10% | 9.1% |
| 20% | 16.7% |
| 25% | 20% |
| 30% | 23.1% |
| 33.3% | 25% |
| 40% | 28.6% |
| 50% | 33.3% |
| 100% | 50% |
Example Only — these are mathematical conversions, not a recommendation for what your own markup or margin should be.
A common quoting mistake
The mistake usually isn't in the maths — it's in the assumption. A business owner sets a target of "30%" in their head without specifying which figure they mean, applies it as a markup out of habit, and ends up with a lower actual margin than planned. Over a full year of recurring visits, that gap compounds into a meaningfully different profit outcome than intended.
Being explicit about which figure you're targeting — and checking both — removes the ambiguity. See Understanding Profit Margin on Commercial Cleaning Jobs for a broader look at what margin means for a cleaning contract, including revenue per labour hour.
How the Quote & Profit Calculator handles both figures
The Commercial Cleaning Quote & Profit Calculator calculates your estimated cost per visit from the labour, supplies, equipment and overhead figures you enter, then shows both your profit margin and your markup side by side against the selling price you propose — so you can see exactly what a target margin means in dollar terms, and how it compares to the markup on cost, without doing the conversion by hand.
Summary
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. They describe the same dollar amount of profit but produce different percentages, and a markup percentage is always numerically lower than the same-sized margin percentage. Knowing which one you're using — and using both deliberately — protects your actual profit outcome.
Try the Commercial Cleaning Quote & Profit Calculator to see your margin and markup calculated together from your own labour, cost and pricing figures.