Markup Calculator
Enter any two of cost, price, markup or margin to get the other figures, with the markup-versus-margin table beneath.
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- Cost
- $50.00
- Profit per item
- $20.00
- Markup (profit ÷ cost)
- 40%
- Gross margin (profit ÷ price)
- 28.57%
| Markup | Margin |
|---|---|
| 10% | 9.09% |
| 20% | 16.67% |
| 25% | 20% |
| 30% | 23.08% |
| 40% | 28.57% |
| 50% | 33.33% |
| 75% | 42.86% |
| 100% | 50% |
How this was calculated
- Profit = price − cost = 70.00 − 50.00 = 20.00.
- Markup = profit ÷ cost = 20.00 ÷ 50.00 = 40.00%.
- Margin = profit ÷ price = 20.00 ÷ 70.00 = 28.57%.
Gross figures before overhead, tax and fees. Educational estimate, not financial advice.
How to calculate markup
Markup is the profit as a percentage of what the item cost you: markup = (price − cost) ÷ cost × 100. To set a price from a markup, use price = cost × (1 + markup ÷ 100). A $50 item with a 40% markup sells for $50 × 1.40 = $70, which leaves $20 of profit. This markup calculator works in four directions: cost and markup, cost and price, cost and margin, or price and margin.
Markup vs margin
Gross margin is the same profit measured against the selling price instead: margin = (price − cost) ÷ price × 100. On the $70 sale the profit of $20 is a 40% markup but only a 28.57% margin. The two are never equal unless the profit is zero, and margin is always the smaller number. To go from one to the other: margin = markup ÷ (100 + markup) × 100 and markup = margin ÷ (100 − margin) × 100. A 50% margin therefore needs a 100% markup, not 50%.
Common mistakes
The classic mistake is to add the margin you want to the cost: cost $60 plus 40% is $84, but at that price the margin is only 28.6%. To get a 40% margin the price must be $60 ÷ (1 − 0.40) = $100. Another is forgetting that both figures are gross: they ignore shipping, card fees, returns, rent and wages, so the money left over is smaller. A margin of 100% or more is impossible, because it would mean the item cost nothing.
Worked example
You buy a jacket for $60 and sell it for $100. Profit is $40, markup is 40 ÷ 60 = 66.67% and margin is 40 ÷ 100 = 40%. If your supplier raises the cost to $70 and you keep the $100 price, profit drops to $30 and margin to 30%. Use the table under the result to compare markup and margin at common levels.
Related calculations
Discounts work against your margin: a 20% discount on a 40% margin item leaves far less than half the profit. Check it with the discount calculator, and use the percentage calculator for other percent-of questions. Business owners paying themselves hourly can convert with the salary to hourly calculator.
Frequently asked questions
How do you calculate markup?
Markup = (selling price − cost) ÷ cost × 100. An item that costs $50 and sells for $70 has a markup of $20 ÷ $50 = 40%.
What is the difference between markup and margin?
Markup divides profit by cost, margin divides profit by price. The $20 profit on a $70 sale is a 40% markup but a 28.57% margin.
How do you turn markup into margin?
Margin = markup ÷ (100 + markup) × 100. A 50% markup is 50 ÷ 150 = 33.3% margin.
How do you find the price for a target margin?
Divide the cost by (1 − margin). For a 40% margin on a $60 cost, the price is $60 ÷ 0.60 = $100.
Can a margin be 100%?
No. A 100% margin would mean the item cost nothing. Margin is always below 100%, while markup can be any size above 0%.