Markups

The Bill of Quantities holds cost. Markups turn cost into the price you quote. Keeping the two apart is what lets you change your margin without touching a single rate.

Markups are set per costing, from Edit Markup.

The three methods

Each markup line has a Calculate Method:

Method	What it does	Typical use
Percentage of the Costs	Adds a percentage of the total cost	Overheads, margin
Percentage of the Contract	Adds a percentage of the contract sum	Fees calculated on the sell price
Fixed Value	Adds a flat dollar amount	A one-off allowance or fee

The distinction between the first two catches people out, so it is worth being precise about it.

Percentage of the Costs is applied to what the job costs you. Add 15% to $400,000 of cost and you add $60,000, giving $460,000.

Percentage of the Contract is applied to the sell price — the number after markup. To end up with a figure that is 15% of the final contract sum, the arithmetic has to work backwards, so the amount added is larger. Add 15% of contract to $400,000 of cost and you add roughly $70,588, giving $470,588 — of which $70,588 is indeed 15%.

These are not the same number

A 15% margin “on cost” and a 15% margin “on the contract” differ by about 2.6% of the contract sum on a $400k job — roughly $10,500. If your contract or your accountant expresses margin one way, set it up that way rather than assuming they are interchangeable.

Worked example

The Hendricks extension comes out at $182,400 of cost in the BOQ. You want overheads and margin on top, plus a fixed allowance for the council bond.

Markup	Method	Value	Adds
Overheads	Percentage of the Costs	8%	$14,592
Margin	Percentage of the Costs	12%	$21,888
Council bond	Fixed Value	$2,500	$2,500

Cost $182,400 + $38,980 = $221,380 before GST.

Change the margin line to 14% and every number moves at once. You have not touched a rate, and the cost side of the estimate is still an honest record of what the job costs you.

Item markup

Individual BOQ items can carry their own Item Markup, applied to that item alone. Use it sparingly — for a trade you price differently from the rest of the job, or a supply-only item you do not want full margin on.

Item markups apply before the costing-level markups, so an item with its own markup still picks up overheads on top.

Seeing the result

The costing metrics panel on the Projects list shows the derivation as a waterfall: cost, each markup step, and the resulting contract sum, with the margin called out.

That panel is the quickest sanity check on an estimate. If the margin looks wrong there, it is nearly always a markup set to the wrong method rather than an error in the bill.

Where markups go next

Once the job is won, the contract price you agreed becomes the figure that progress claims measure against, and the difference between committed cost and the marked-up sell price is what the costing metrics track as the job runs.