Agency markups typically range from 50% to 100% of contractor costs
This calculator helps agencies price client work and contractors understand what agencies charge. Calculate client pricing from contractor costs, or reverse engineer contractor budgets from client budgets.
Or Calculate Reverse: Client Budget to Contractor Budget
How to use this calculator
For agency pricing: enter what you pay contractors and your desired markup percentage. The calculator shows client pricing and profit margins. For contractor budgets: enter the client's total budget and your target markup to see how much you can spend on contractors while hitting your margin.
How agency markup is calculated
Markup is calculated as a percentage of contractor cost. A 50% markup means charging clients $1.50 for every $1.00 spent on contractors. Profit margin is markup expressed as a percentage of total client price.
Client Price = Contractor Cost × (1 + Markup%)
Profit Margin = Markup% / (1 + Markup%)Frequently asked questions
What's a typical agency markup?
50-100% is standard for most agencies. Specialized agencies with unique expertise can charge 100-200%. Commodity services struggle to exceed 30-40%. Your markup should cover overhead, sales, account management, and profit — not just be a pass-through of contractor costs.
What's the difference between markup and margin?
Markup is profit as a percentage of cost. Margin is profit as a percentage of price. A 50% markup equals a 33% margin. A 100% markup (doubling your cost) equals a 50% margin. Agencies often think in markup, but accountants report margin.
Should I tell clients my markup?
No. Quote the total project price, not itemized contractor costs plus markup. Clients hire agencies for results, expertise, and convenience — not to comparison shop contractor rates. Your markup covers real business value like project management, quality control, and accountability.
Can I charge different markups for different services?
Yes. Many agencies use higher markups for strategic work (100-200%) and lower markups for commodity execution (30-50%). Senior talent might carry higher markups than junior contractors. Adjust based on your value-add, not just contractor pass-through costs.
How do I justify my markup to clients?
Don't talk about markup. Focus on outcomes, risk reduction, and expertise. You're not just reselling contractor time — you're providing project management, quality assurance, reliable delivery, and accountability. If clients want cheaper, they can hire contractors directly and manage them.