Project Bid Calculator
Bid price from cost, contingency, and margin
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Project Bid Calculator turns the numbers behind bid price from cost, contingency, and margin into a result, step by step. Type Direct Cost ($), Contingency (%) and Profit Margin (%) into Project Bid; each keystroke re-runs the math. Project Bid prints the result and its working. Project Bid suits budgeting and planning checks. Nothing is uploaded while Project Bid works, and the figures stay put. Project Bid is part of the Business collection on CalcProMaster, alongside project bid calculator price margin contingency contractor estimate, free online project bid calculator and more. Project Bid is great for comparing scenarios. Change one value and watch. Start with Project Bid; the first number takes seconds.
What the defaults give
$50,000 of direct cost plus 10% contingency is $55,000.
With a 20% margin on price, the bid is $68,750 — not the $66,000 a 20% markup would give.
The formula
Cost with contingency = direct cost × (1 + contingency %)
Bid = cost with contingency ÷ (1 − margin %)
The division is the whole point. A margin is a percentage of the price you charge, so if the margin is 20%, cost must be 80% of the bid. Dividing by 0.8 recovers the 100%. Multiplying by 1.2 instead sets cost at 83.3% of price, which leaves a 16.7% margin and quietly gives away $6,250 on this job.
Worked examples
$50,000, 10% contingency, 20% margin → $68,750
$50,000, 0% contingency, 20% margin → $62,500
$50,000, 10%, 10% margin → $61,111
$50,000, 10%, 25% margin → $73,333
$100,000, 10%, 20% margin → $137,500
$50,000, 20%, 20% margin → $75,000
Markup and margin are different numbers
A 20% margin equals a 25% markup; a 30% margin equals a 42.9% markup. The conversion is markup = margin ÷ (1 − margin). Once you know this, quotes from subcontractors become comparable: a supplier quoting "cost plus 15%" is offering a 13% margin, and one quoting a 15% margin is charging 17.6% over cost.
Which to use depends on how your industry quotes. Retail and construction often talk margin on price; trades and resale often talk markup on cost. Mixing the two in one bid is how jobs end up profitable on the spreadsheet and thin in the bank.
What the bid does not include
Overheads — office, insurance, vehicles, admin salaries — are not in direct cost and are not in the margin either unless you put them there. A 20% margin that has to cover 12% of overhead leaves 8% of real profit. Many contractors use a separate overhead recovery percentage added to cost before the margin is applied, which keeps the two visible.
Contingency is not profit either: it is a budget for the things that go wrong, and anything unspent is usually best treated as profit rather than quietly absorbed. Also check whether the bid is exclusive of tax, whether retention is withheld, and what the payment terms are — 60-day payment on a 20% margin can wipe out the profit in financing cost alone.
Frequently Asked Questions
How do I calculate a bid with a 20% margin?
Divide the cost by 0.8. A $55,000 cost becomes a $68,750 bid, because 20% of the price must be margin.
Why is multiplying by 1.2 wrong for margin?
Because 1.2 applies markup to cost, not margin to price. It leaves a 16.7% margin instead of 20%, giving away $6,250 on a $50,000 job.
What is the difference between margin and markup?
A 20% margin equals a 25% markup. Convert with markup = margin ÷ (1 − margin), and be explicit about which one a quote uses.
Does the bid cover overheads?
Only if you included them in direct cost. Otherwise a 20% margin that must cover 12% of overhead leaves 8% of actual profit.
Should contingency be counted as profit?
No. It is a budget for unknowns. Unspent contingency is best treated as additional profit rather than absorbed into the next job.
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