Markup

Markup is the difference between the bill rate and the pay rate, expressed as a percentage of the pay rate. The formula is bill rate divided by pay rate, minus one. A $26 bill rate on an $18 pay rate is roughly a 44% markup. Markup is not profit: it has to cover payroll taxes, workers' compensation, insurance, screening, recruiting, dispatch and pay processing before anything is left. Workers' comp costs vary by job type, so markups vary between a banquet server and a demolition laborer.