06.1 · Markup, Margins and Sell Rates

Markup vs Margin

These two words get used interchangeably in the wild. TX1 treats them as distinct, sequential stages.

The Sequence

DirectTotal
  + Σ Apportionment           →  BuildUpCost
  + AllocatedMarkup (per type) →  Subtotal (cost + markup)
  + AllocatedRiskMargin        ─┐
  + AllocatedCorporateMargin   ─┼─ Margin stack
  + AllocatedProfitMargin      ─┘
                               →  SellTotal

Definitions

Term	Where it is applied	Why
Markup	Per resource type (labour / material / plant / sub / other).	Recovers risk of using that resource category.
Margin	Project-wide, on top of cost + markup.	Three named pools: Risk, Corporate Overhead, Profit.

Why Two Layers?

Markup varies by type because the risk varies. Subcontract rates are low-risk (you pass the liability along), so you apply a smaller markup. Labour rates are high-risk (you own the crew), so you apply a bigger markup.

Margin does not vary by resource type — it covers cross-cutting risks (weather, finance, corporate overhead, profit target) applied to the whole job.

Input Types

Each markup and margin field supports either:

Percentage (MarkupInputType.Percentage = 0) — enter 15 for 15%.
Absolute (MarkupInputType.Absolute = 1) — enter a fixed dollar amount.

When both are present, the percentage is applied first, then the absolute is added.

The Three Margin Pools

Pool	Typical range	Covers
Risk Margin	3 – 8 %	Contingency for unknowns.
Corporate Overhead Margin	3 – 6 %	Head office, accounting, legal, IT.
Profit Margin	5 – 15 %	Return to owners.

Why Keep Them Separate?

Commercial managers want to see each line item's Risk / Corp / Profit components independently so they can negotiate with clients. Lumping them together loses visibility.

What The Rest of This Section Does

02 — the Markup screen and where each field lives.
03 — per-type markups explained.
04 — risk / corporate / profit margins.
05 — the full sell rate calculation.
06 — configuring the sell rate view.
07 — what-if scenarios.