When someone says, "You did a bang-up job" what does that mean?

That’s how sarcasm works. The idiom’s traditional meaning is that you did a good job. If someone says it sarcastically, they mean the opposite.

Both you and your sister are correct. Typically, a bang-up job is a compliment. As @lapilofu said, if used when someone mucked up, then the delivery is done in a sarcastic tone.

Where I come from, it’s a compliment!

Depends on how it’s used. That’s why I lurve sarcasm. ^_^

“Wow, Chuck, that was a bang-up job, catching that typesetting error before we went to print!”

“Wow, Chuck. You typeset that Bible and left the word ‘not’ out of the seventh commandment. Bang-up job, now we have to recall them.”

Funny, I’ve had it said to me a number of times over the years—I think the first time was from my dad when I was very young—but never sarcastically. I always loved that compliment.

The term “bang-up” in itself doesn’t really sound like a compliment.

@Aesthetic_Mess i guess it depends on where you are from…here, it’s a compliment!

I wonder if the term itself wasn’t developed as a sarcastic remark, which became positive through much use, and then being sarcastic about the sarcastic remark would then be negative.

I think my head just collapsed.

Anyway, something like when, say, my husband’s drummer did a really great job recording, and the first response was “What the hell was that! You suck!” with a smile, that’s a compliment. Maybe “Bang up job” got started like that.

As others have already said, it means “a good job” when it’s said with sincerity.

I tried to find the etymology of the expression, because I was also curious why a “not-good-sounding” phrase would mean “good”, but I didn’t find it. Perhaps it’s a takeoff on “bang on”, which means “exactly right”.

Here’s a good reference for future searches of this kind, though: The Online Etymology Dictionary