Markup & Margin Calculator
Convert between markup and margin — the two figures most often confused when setting prices.
Markup & Margin Calculator
Results
Margin = profit ÷ selling price · Markup = profit ÷ cost
Markup and margin are different denominators
Both describe the same profit. Markup measures it against cost; margin measures it against price. Confusing them systematically underprices.
markup % = (price − cost) ÷ cost × 100 margin % = (price − cost) ÷ price × 100
- cost
- What you paid, including landed cost and direct costs
- price
- What you sell for
Worked example
- Cost
- 60
- Price
- 100
- Profit
- 40
- Markup
- 40 ÷ 60
- Margin
- 40 ÷ 100
Markup 66.7% · Margin 40.0%
Conversion: margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin). They are only equal at zero, and diverge sharply as they rise — a 100% markup is a 50% margin, and a 300% markup is a 75% margin.
Markup to margin at a glance
| Markup | Margin | Multiplier on cost |
|---|---|---|
| 10% | 9.1% | 1.10× |
| 20% | 16.7% | 1.20× |
| 25% | 20.0% | 1.25× |
| 33.3% | 25.0% | 1.33× |
| 50% | 33.3% | 1.50× |
| 66.7% | 40.0% | 1.67× |
| 100% | 50.0% | 2.00× |
| 150% | 60.0% | 2.50× |
| 300% | 75.0% | 4.00× |
The costly error: aiming for a 40% margin and applying a 40% markup. That yields a 28.6% margin — you have underpriced by more than a quarter of your intended profit, on every unit.
About
The Markup & Margin Calculator helps retailers, wholesalers, and service businesses price their products correctly. There are three modes: calculate margin and markup from a known cost and selling price; calculate the selling price and markup from a desired gross margin percentage; or calculate the selling price and margin from a desired markup percentage. Understanding the difference between markup and margin is critical — a 50% markup is not the same as a 50% margin. Markup is profit divided by cost; margin is profit divided by selling price. This tool makes both crystal clear with instant results.
How to use
- 1 Select the mode tab that matches your starting point: "From Cost & Price", "From Desired Margin", or "From Desired Markup".
- 2 Enter the cost price (what you pay for the item or service).
- 3 Enter the second input — selling price, desired margin %, or desired markup % depending on the mode.
- 4 The profit, gross margin %, and markup % are calculated and displayed instantly.
- 5 Switch between modes to explore different pricing scenarios without re-entering the cost.
- What is the difference between markup and gross margin?
- Markup is profit expressed as a percentage of cost: (Selling Price − Cost) ÷ Cost × 100. Gross margin is profit expressed as a percentage of selling price: (Selling Price − Cost) ÷ Selling Price × 100. For a product costing $60 and selling at $100, the markup is 66.7% but the margin is 40%. Because the denominators differ, the same profit produces different percentages — which is why mixing the two up leads to pricing mistakes.
- If I want a 50% gross margin, what markup do I need?
- A 50% gross margin requires a 100% markup. The formula is Markup % = Margin % ÷ (1 − Margin %). For 50% margin: 0.50 ÷ 0.50 = 1.00 = 100% markup. Use the "From Desired Margin" mode and enter 50 to see the required selling price and the resulting markup automatically.
- Which metric should I use — markup or margin?
- Most accounting and financial reporting uses gross margin, because it relates profit to revenue. Retail and wholesale businesses often quote markup internally because it is easier to apply to cost prices. The important thing is to be consistent and know which one you are using when setting prices or comparing with industry benchmarks.
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