Markup is not margin — and the gap costs money
Markup is measured against what something costs you. Margin is measured against what the customer pays. Put 30% on top of €1,000 of materials and you sell at €1,300 — but that €300 is only 23.1% of the selling price. Tell yourself "I make 30%" while your accountant reads the margin off the accounts, and the business is thinner than you think it is. When someone says "the margin in this game is 30%", check which number they actually mean.
| Markup on cost | Margin on price |
|---|---|
| 10% | 9.1% |
| 20% | 16.7% |
| 25% | 20.0% |
| 30% | 23.1% |
| 50% | 33.3% |
| 100% | 50.0% |
What should a trade mark materials up by?
There's no rulebook, but the markup has to earn its keep: it covers collecting the materials, fronting the money before you're paid, the odd wrong part, wastage, and the guarantee you're giving on the whole job. Many Irish trades run somewhere between 10% and 30% on materials depending on the trade and the job — and remember the markup on materials is separate from your labour rate, which should stand on its own (work yours out with the day rate calculator).
Marked-up materials can flip your VAT rate
On supply-and-fit work, if materials exceed two-thirds of the ex-VAT job price, the whole invoice moves from 13.5% to 23% under the two-thirds rule. Check materials-heavy jobs in the VAT calculator and the VAT guide.
However you price it, the quote should show labour and materials as separate lines — customers trust numbers they can read, and it protects you when they ask to trim the scope. The how to write a quote guide covers the full structure, and there's a trade-specific tour of Grafta for carpenters, tilers and builders — the trades where materials do the heavy lifting.
General information, not financial advice — your numbers are your own.