How Markup Works

Last Updated By Michael Croteau

Updated at August 16th, 2021

In your project below the list of parts, you’ll see a section labeled “Markup” with three parts below it: “Material”, “Labor”, and “Subcont”. These allow you to set your markup percentages for each of the three categories. 


In our the article about how costs are calculated for parts, we discussed that there are three aspects of the price for each part: material, labor, and subcontractor costs. Parts can either have material and labor or be subcontractor costs, this is to differentiate between costs to your company (if you buy the materials or pay the laborer) or a subcontractor (subcontractor buys the materials and you pay the subcontractor). 

You can then markup each of these categories separately for your project. Lets imagine we have a part that is for providing and installing cabinets. The costs for that part might be like so:

Materials- $500

Labor- $100

Total- $600

It is important to remember that this is the cost before any markup is applied (think of it like, the cost to you not the cost to the customer). Now let’s decide on  our markup percentages. You can change these easily by clicking the + or – buttons. 

Markup %’s

Materials- 50%

Labor- 25%

These percentages will be used to calculate the markup for all of the material and labor costs (not just for the single part that we have in this example. Let’s see how the markup in dollars gets calculated:

Materials- $500 x 50% = $250

Labor- $100 x 25% = $25

Total- $275

Meaning that the total costs for this part (including the markup) will be:

Materials- $500 + $250 = $750

Labor- $100 + $25 = $125

Total Cost- $875

You can see now how the markup gets applied to your parts. You can set your default markup percentages (so you don’t have to change them for each project) in Options-> Miscellaneous

Want to markup an individual line item?

No problem! We've got a walkthrough guide for that too!

Overview

In this example, we'll show how you can customize the markup for one particular line-item. Its extremely easy to do, let's take a look!

Simple Steps:

Let's say your item is using 50% markup for Material, Labor, and Subcontractor costs (this is the default in Clear Estimates) but you want to use 25% for Materials, 10% for Labor, and 75% for Subcontractor costs. Well, that's easy!

  1. First, Open the Part from your project by clicking the blue "edit" button
  2. In the "Material Cost Calculation" section, click the "Markup" dropdown on the right side
  3. Un-check the "Use Project Markup" box
  4. Type in 25% for the Material Markup
  5. [Optional] Repeat these steps for the Labor and Subcontractor costs

See It In Action!









Was this article helpful?