Margin & Markup Calculator

Calculate profit margins and markup percentages

About Margin & Markup Calculator

Margin and markup both describe the relationship between cost and selling price, but they're calculated differently and often confused. Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. Using the wrong one when setting prices can significantly under- or over-price a product.

Formula

Margin = (Price − Cost) / Price × 100 | Markup = (Price − Cost) / Cost × 100

How It Works

Enter your cost and either your desired margin or markup percentage
The calculator solves for the selling price that achieves your target margin or markup
You can also enter cost and selling price directly to calculate the resulting margin and markup
Profit amount in dollars is shown alongside both percentages

Tips

Margin is always a lower percentage than markup for the same cost and price, since it's divided by the larger number (price) instead of the smaller one (cost)
A 50% markup is only a 33.3% margin — the two are not interchangeable, and mixing them up leads to underpricing
Retail businesses often think in margin (percent of revenue that's profit); many small businesses and wholesalers think in markup (percent added to cost)

Frequently Asked Questions

What is the difference between margin and markup?

Margin is profit divided by selling price (what percentage of revenue is profit); markup is profit divided by cost (how much you added on top of cost). They describe the same dollar profit but as different percentages of different base numbers.

How do I convert markup to margin?

Margin = Markup / (1 + Markup), expressed as a decimal. For example, a 50% markup (0.5) converts to a margin of 0.5 / 1.5 ≈ 33.3%.

How do I convert margin to markup?

Markup = Margin / (1 − Margin), expressed as a decimal. For example, a 25% margin (0.25) converts to a markup of 0.25 / 0.75 ≈ 33.3%.

If I want a 50% profit margin, what price should I charge?

Price = Cost / (1 − Margin). For a $40 cost item with a 50% margin target: $40 / (1 − 0.5) = $80 selling price.

Why does a 100% markup only give a 50% margin?

Because markup is profit divided by cost, while margin is profit divided by price. Doubling the cost (100% markup) means profit equals cost, and profit as a share of the now-doubled price is exactly 50% — the two percentages diverge more as the percentage gets larger.