Project markups are the percentages added to your cost items for Labor Burden, Sales Tax, General Liability, Overhead and Profit. You set them for the whole project in Set Markups, and you can change them for a single cost item. Your company's default rates can fill these in for you; see How do default rates work?.
Set markups for the project
Step 1: Open the project, then click Bidding > Worksheet. On the Base Bid tab, click Set Markups.
Step 2: Enter the percentage for Labor Burden, Sales Tax, General Liability, Overhead and Profit. Under Sales Tax, check the cost types the tax applies to.
Step 3: In Sq. Ft., enter the project's square footage. It is used for the cost per square foot on the bidding reports.
Each change applies as soon as you leave the field, and the dollar amounts and the worksheet totals update. Close the window when you are done.
How markups are calculated
Markups build on each other in this order:
Labor Burden and Sales Tax are calculated on the cost item.
General Liability is calculated on the cost item.
Overhead is calculated on the cost item plus Labor Burden, Sales Tax and General Liability.
Profit is calculated on all of the above, including Overhead.
For example, a $5,200 labor item with Labor Burden 30%, General Liability 0.55%, Overhead 12.3% and Profit 6.5% gets $1,560.00 Labor Burden, $28.60 General Liability, $835.00 Overhead (12.3% of $6,788.60) and $495.53 Profit (6.5% of $7,623.60).
Note: Because Profit is calculated on a total that already includes Overhead, Overhead and Profit set to the same percentage do not produce the same dollar amount.
Add a Custom Markup
The last line in Set Markups is the Custom Markup. It adds a percentage of the Project Total, after all other markups, on top of the Project Total. It is often used for sales tax on the whole contract.
Step 1: In the first box, type the name you want to show on the bidding reports. If you leave it blank, it shows as Custom Markup.
Step 2: Enter the percentage, or enter a dollar amount and the percentage is calculated for you.
When the Custom Markup is more than 0%, it is added to the Project Total and shows as its own line on the bidding reports, such as the Expanded Division Report.
Important: The Custom Markup does not recalculate on its own. If you change your bid after entering it, open Set Markups and enter the Custom Markup again so it matches the new total.
Set markups for one cost item
Step 1: On the bidding worksheet, click the price of the cost item.
Step 2: In the markup box that opens, enter the percentages to use for that cost item.
Contingency: use a cost code, not the Custom Markup
The Custom Markup isn't the best place for contingency, because funds added there can't be moved to cost codes later. Instead, put contingency in a regular cost code, click its price, and set its markups to zero in the markup box. Do this at the end of Bidding, because these markups won't recalculate.