Browse Forums General Discussion Re: builders margin 2Oct 28, 2022 3:44 am Architectural Homes & Duplexes - specialising in custom designing homes to your budget Get a Free Onsite Consultation Today or send a PM for information, questions or advice. Re: builders margin 4Oct 28, 2022 8:21 am Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: builders margin 7Oct 28, 2022 8:49 am Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: builders margin 8Oct 28, 2022 10:03 am StructuralBIMGuy Method 2 is incorrect No margin on GST Cost of goods $100 GST 10% $ 10 Net Total $110 Add Margin 20% of $110=$22 Total = $132 Thanks Sorry I am confused. Is there to be no GST added onto the margin? I am NSW based if it makes a difference. Re: builders margin 9Oct 28, 2022 12:05 pm mapr StructuralBIMGuy Method 2 is incorrect No margin on GST Cost of goods $100 GST 10% $ 10 Net Total $110 Add Margin 20% of $110=$22 Total = $132 Thanks Sorry I am confused. Is there to be no GST added onto the margin? I am NSW based if it makes a difference. GST will definitely be paid on the margin. The builder is supplying a service which is taxed, unless your contract says that the margin is GST inclusive in which you still pay GST but then the 20% becomes 18.1818%. We use the NSW Fair trading contract which says that the margin excludes GST, so we add the margin to the net cost of the goods and then add GST to the total. I am not sure what the HIA contract says. Architectural Homes & Duplexes - specialising in custom designing homes to your budget Get a Free Onsite Consultation Today or send a PM for information, questions or advice. Re: builders margin 10Oct 28, 2022 2:49 pm We are doing cost + so get all the builders base prices (ex GST) and work from there for what it will cost us. Good/service exc GST: $1000 GST: $100 Cost to builder: $1100 Exmaple Margin of 10% BM: $110 GST on BM: $11 Cost to us = 1100 + 110 + 11 = $1221 Re: builders margin 11Oct 28, 2022 3:51 pm Budapest We are doing cost + so get all the builders base prices (ex GST) and work from there for what it will cost us. Good/service exc GST: $1000 GST: $100 Cost to builder: $1100 Exmaple Margin of 10% BM: $110 GST on BM: $11 Cost to us = 1100 + 110 + 11 = $1221 HIA cost plus? you've said base prices (ex GST) but your working inc GST? I think. My mind is about to explode. Re: builders margin 12Oct 28, 2022 4:10 pm My builder always uses costs ex GST when talking about quotes etc, so I've had to get used to that. GST is still applied of course so I need to factor that in to work out how much it will ultimately cost me. Re: builders margin 13Oct 28, 2022 4:19 pm Budapest We are doing cost + so get all the builders base prices (ex GST) and work from there for what it will cost us. Good/service exc GST: $1000 GST: $100 Cost to builder: $1100 Exmaple Margin of 10% BM: $110 GST on BM: $11 Cost to us = 1100 + 110 + 11 = $1221 GST is not a cost to the builder - they claim it back. Re: builders margin 14Oct 28, 2022 5:27 pm How can you claim GST when you paid the builder with a brown paper bag full of money...just curious Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: builders margin 15Oct 28, 2022 5:31 pm SJT76 Budapest We are doing cost + so get all the builders base prices (ex GST) and work from there for what it will cost us. Good/service exc GST: $1000 GST: $100 Cost to builder: $1100 Exmaple Margin of 10% BM: $110 GST on BM: $11 Cost to us = 1100 + 110 + 11 = $1221 GST is not a cost to the builder - they claim it back. In Budapest's example the builder would collect $111 worth of GST from the client and pay that to the tax Dept in their BAS. It would have been more correct to say "cost from builder" The end user pays the GST every one down the line claims the GST back. Accessible Carpentry & Cabinets accessiblecarpentry@gmail.com accessiblecarpentry.com.au https://www.facebook.com/pages/Accessible-Carpentry-Cabinets/583314911709039 Re: builders margin 17Nov 09, 2022 4:48 pm Like ⋅ Add a comment ⋅ Pin to Ideaboard ⋅ There is some confusion between MARGIN and MARKUP. The comments so far refer to markup, not margin, and margin is real and should not be confused with markup. If something costs $100 and I want it to sell it with a 20% margin, then the margin works out at $25 and the final cost to the client is $125. (that is the margin is 20% OF the final selling price) But if the cost is $100 and I want to sell with a 20% markup, then the profit is $20 and the final cost to the client is $120. Notice that the $25 dollars MARGIN represents 20% of the $125 selling price. Whereas the $20 markup represents 16.7% of the $120 selling price. Many builders actually make this mistake and charge x% markup, when they are contractually entitled to charge x% margin. Margin is used in all manufacturing and building scenarios, it always has the same meaning. Markup is used mainly in shops and it always has the same meaning. It will be easier to understand if we talk about 50% markup, which means something costing $100 will be sold for $100 + 50% of $100 = $150 If we use 50% margin, this means that something costing $100 needs to sell for $200 for the margin to be 50% of the selling price. QED "ECOECO" At 'EcoEco', we design windows, we design the best windows, we do it for you, so that when you’re happy we are happy. Tel. 1800 326 326 Re: builders margin 18Nov 09, 2022 5:18 pm ECOECO Like ⋅ Add a comment ⋅ Pin to Ideaboard ⋅ There is some confusion between MARGIN and MARKUP. The comments so far refer to markup, not margin, and margin is real and should not be confused with markup. If something costs $100 and I want it to sell it with a 20% margin, then the margin works out at $25 and the final cost to the client is $125. (that is the margin is 20% OF the final selling price) But if the cost is $100 and I want to sell with a 20% markup, then the profit is $20 and the final cost to the client is $120. Notice that the $25 dollars MARGIN represents 20% of the $125 selling price. Whereas the $20 markup represents 16.7% of the $120 selling price. Many builders actually make this mistake and charge x% markup, when they are contractually entitled to charge x% margin. Margin is used in all manufacturing and building scenarios, it always has the same meaning. Markup is used mainly in shops and it always has the same meaning. It will be easier to understand if we talk about 50% markup, which means something costing $100 will be sold for $100 + 50% of $100 = $150 If we use 50% margin, this means that something costing $100 needs to sell for $200 for the margin to be 50% of the selling price. QED Thanks for your very interesting and thought provoking post. To be honest I had no idea margin was defined this way. I won't be changing the way we charge as I personally think it is more transparent to use the markup definition. But I wonder how many builders understand this and are applying it? Architectural Homes & Duplexes - specialising in custom designing homes to your budget Get a Free Onsite Consultation Today or send a PM for information, questions or advice. Re: builders margin 19Nov 10, 2022 7:47 am You’re welcome. Isn’t the builders’ margin limited by law? I could be wrong. If it is then it doesn’t make sense to limit it further. "ECOECO" At 'EcoEco', we design windows, we design the best windows, we do it for you, so that when you’re happy we are happy. Tel. 1800 326 326 Re: builders margin 20Nov 11, 2022 8:37 am ECOECO You’re welcome. Isn’t the builders’ margin limited by law? I could be wrong. If it is then it doesn’t make sense to limit it further. We use the NSW fair trading contract which limits it to 20% Architectural Homes & Duplexes - specialising in custom designing homes to your budget Get a Free Onsite Consultation Today or send a PM for information, questions or advice. Site works are just about to start on our build with Blueprint in Midvale. viewtopic.php?f=31&t=106894 2 4145 Hi all, We are looking to build a new two storey house in western Sydney. Can anyone recommend a smallish builder to go with? We are trying to stay away from the big… 0 12427 I would never build with Fowler homes. I built with them in 2021 and till date maintenance issues are pending. 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