Pricing a remodeling job well is less about a magic percentage and more about a complete cost, a clear scope, and a formula that matches the word you meant - markup or margin. This article is for small remodeling and related home-service businesses. It is educational. It does not promise that your income, profit, or cash will improve, and it is not a substitute for a CPA, attorney, or licensed estimator.
Start with a written scope
A vague scope produces a vague cost. Write what is included, what is excluded, and the assumptions that, if wrong, would change the price. For a hall bathroom remodel, that might mean removing a tub and vanity, setting a new shower, vanity, and toilet, weekday hours, and a stated allowance for unexpected drywall or plumbing repairs - with rot or a moved drain called out as a change, not a silent extra.
The same discipline applies to an exterior paint job, a roof tear-off, or an HVAC replacement: name the work, the materials you will furnish, and what is not in the number.
Build a complete job cost
Direct costs exist because this job exists: crew hours on site, materials, a dumpster, a permit, a rental, a trade you hire for that scope. Use a burdened labor rate, not only the wage on a paycheck. Payroll taxes, workers' compensation, and paid time that is not on that job still have to be funded.
Overhead exists because the company exists: insurance, vehicles, software, unpaid time spent quoting work you do not win. Give the job a fair share - for example, by spreading annual overhead over productive labor dollars or hours - instead of hoping a markup will cover a pot you never counted.
What belongs on that sheet is spelled out in the contractor job costing template guide. A filled teaching file is also part of the MarginMaster course. The method matters more than any one file: write the cost the same way on every bid.
Convert that cost to a price
Markup and margin are not interchangeable. A 25% markup on cost is not a 25% margin on price. Use the formulas in markup vs. margin for contractors, or try the free calculator, and look at margin dollars as well as the percentage. Then decide, in your own judgment, whether those dollars are enough for the risk, the schedule, and the cash lag.
Example: a hall bathroom remodel (illustrative only)
Suppose the complete cost - burdened labor, materials, other direct costs, and an overhead share - is US$14,400, and the signed price is US$18,000. Margin dollars are US$3,600, which is a 20% margin (and a 25% markup). These numbers are a teaching example, not a typical bathroom and not a recommended target.
On paper the job looks fine. Cash can still be tight: materials and crew wages often leave the bank in weeks 1-2, a progress bill may wait for approval, and a punch list can delay the final check. Sold is the agreement. Billed is the invoice. Cash is the deposit. Margin is what is left after cost. Map those dates on the job before you treat US$3,600 as money you can spend.
If the same US$14,400 cost were priced to a 25% margin instead of a 25% markup, the price would be US$19,200, not US$18,000. That is the same mix-up described in the markup vs. margin article, applied to a remodel.
Attach the price to a quote
A number in a calculator is not yet a bid. Put the price on a page with scope, inclusions, exclusions, assumptions, payment terms you actually use, and a path for change orders. Have an attorney review language before you rely on it. If a general contractor's form becomes the controlling document, know what in your quote survived.
What this article will not do
- It will not tell you the "right" margin for bathrooms, kitchens, or any other remodeling trade.
- It will not promise that a calculated price is what a homeowner or general contractor will pay, or that field hours will match the estimate.
- It is not accounting, tax, payroll, or legal advice.
If you want a written course and reusable spreadsheets for costing, pricing, quotes, crew labor, and cash, the MarginMaster course is US$59, one-time, with instant access on a download page after Stripe checkout. We do not send a confirmation email, and we do not promise income or margin results.