How Margin and Markup are Calculated

When bill and pay rates are entered on the order, the margin and markup calculations are dependent upon your prior margin configuration. This topic discusses calculations for margin and markup.

Calculating Margin

The margin calculation on the Order - Billing page subtracts costs from the bill rate and then divides by the bill rate. The costs include the pay rate, overhead costs (fixed cost margin), and workers compensation premiums.

Margin = ((Bill Rate - Cost) / Bill Rate) * 100

Calculating Markup

The markup calculation on the Order - Billing page subtracts the pay rate from the bill rate and then divides by the pay rate.

Markup = ((Bill Rate - Pay Rate) / Pay Rate) * 100