Margin & Markup Calculator

Written byOleh Soloninupdated 5 October 2026

Currency

Cost

Selling price

Result

Profit

$20.00

Margin, %

20%

Markup, %

25%

This result is informational only and is not professional advice.

Same profit, two different percentages

Enter cost and selling price to get profit, margin and markup. A 50% markup is a 33% margin, and mixing them up loses money.

Margin and markup describe the same profit against different bases. Margin is profit as a share of the selling price; markup is profit as a share of the cost.

Buy at 100 and sell at 150 and you have a 50% markup but a 33.3% margin. Pricing a product to a 'fifty percent margin' by adding fifty percent to cost is a common and expensive error.

How to use

Enter the cost — what the item costs you, before rent, wages and delivery unless you allocate those per unit.
Enter the selling price the customer actually pays.
Read the profit, the margin and the markup; to hit a target margin, adjust the selling price and watch the percentage.

Two formulas that are easy to confuse

The profit is the same either way: selling price minus cost. What differs is the denominator. Margin = profit ÷ selling price × 100; markup = profit ÷ cost × 100. While the price is above cost, markup exceeds margin, because the same profit is divided by the smaller figure. Sell below cost and profit, margin and markup all turn negative: a cost of 100 and a price of 80 give a profit of −20, a margin of −25% and a markup of −20%. With no profit at all, both are zero.

Converting between them needs no calculator: margin = markup ÷ (100 + markup) × 100, and markup = margin ÷ (100 − margin) × 100. Hence the familiar pairs: a 25% markup is a 20% margin, and a 100% markup is a 50% margin.

Margin, % = markup ÷ (100 + markup) × 100. Worked out with this calculator.
Markup	Margin	Price on a cost of 80	Profit
10%	9.1%	88	8
25%	20.0%	100	20
30%	23.1%	104	24
50%	33.3%	120	40
100%	50.0%	160	80
150%	60.0%	200	120
300%	75.0%	320	240

Pricing to a target margin

The price comes from a division, not an addition: price = cost ÷ (1 − margin). On a cost of 80 with a 40% margin in mind, that is 80 ÷ 0.6 = 133.33, not the 112 you get by adding forty percent. The 21.33 per unit between those two numbers is what the confusion costs.

The reverse mix-up is just as common: a buyer quotes a markup while a manager thinks in margin. Keep one anchor in mind — a 100% markup equals a 50% margin — and remember that above that point the two diverge faster the bigger the numbers get.

What this calculation leaves out

This is gross margin on a single item: price minus direct cost. Rent, wages, advertising, card fees and tax are not in it, so a healthy gross margin does not by itself mean a profitable business. What is left after everything else is net margin, and that is a different calculation.

Sales tax deserves its own warning. If the price includes tax and the cost does not, the margin comes out flattering and wrong. Work out profit on a price without the tax you pass on and a cost without any tax you can reclaim; tax you cannot reclaim belongs in the cost. Two tax-inclusive figures at the same rate give the same percentage but overstate the profit in money by the tax itself: 120 − 96 = 24 instead of 100 − 80 = 20.

What this calculator shows

Profit in currency terms
Margin as a percentage of revenue
Markup as a percentage of cost

What to keep in mind

Cost means the direct cost of the item; overheads are not included.
With a positive cost, margin stays below 100%, while markup has no upper limit; a zero cost gives a 100% margin and an undefined markup.

FAQs

What is the difference between margin and markup?

The base. Margin divides profit by the selling price; markup divides it by the cost. Markup is always the larger number.

How do I price for a target margin?

Divide the cost by (1 − margin). For a 40% margin on a cost of 60: 60 ÷ 0.6 = 100.

Why can margin never hit 100%?

It would require a cost of zero. Markup has no such ceiling — buy at 10, sell at 100 and that is 900% markup but a 90% margin.

Which one should I quote?

Retail and finance generally talk in margin; wholesale and manufacturing often use markup. Just be explicit about which, because the numbers differ.

How do I convert markup to margin and back?

Margin = markup ÷ (100 + markup) × 100, and markup = margin ÷ (100 − margin) × 100. A 50% markup is a 33.3% margin, while a 50% margin needs a 100% markup.

Should margin be worked out with or without sales tax?

Without it, and on the same basis as the cost. Taking a tax-inclusive price against a tax-exclusive cost inflates the percentage: at 20% tax, a price of 120 with tax and a cost of 80 show a 33.33% margin instead of the real 20%.

What does a negative margin mean?

The item sells for less than it cost. The calculator shows the minus in the profit and in both percentages; it happens when clearing stock, where recovering cash matters more than earning on it.

Worked example

The gap between the two

Input: Cost 80, selling price 100

Output: Profit 20 · Margin 20% · Markup 25%

Note: The same 20 of profit produces two different percentages purely because the denominator changes.

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