Markup compares profit with cost. Margin compares profit with sales. The two percentages describe different things, even when the cash profit is identical.
A simple example without fees
Suppose a job costs 100 in your chosen currency. A 30% markup adds 30, producing a sale price of 130. The margin is 30 ÷ 130, or 23.08%.
To retain a 30% margin, divide 100 by 0.70. The required sale price is 142.86, before rounding. The profit is 42.86, which is 30% of sales.
Price using margin = cost ÷ (1 − margin)
Margin = markup ÷ (1 + markup)
Payment fees change the denominator
Fees that rise with the sale price cannot be treated as a fixed cost guessed in advance. HoopLedger solves for the price after your entered percentage fee, fixed fee, and target margin. If a tax rate is entered, the percentage fee is applied to the tax-inclusive customer total while tax is excluded from profit.
Different payment providers can charge on different bases. Verify your actual fee schedule, combine multiple fixed charges when a deposit and balance both incur a charge, and do not enter a fee that is already included in your other costs.
Rounding can improve the modeled margin
The tool rounds each item up to the chosen increment, then multiplies by the accepted quantity. It reports the resulting margin instead of assuming it exactly equals the target. This also makes the customer quote’s unit price and total reconcile.