Markup & Margin Calculator
Pricing fundamentals
Margin vs. markup: what is the difference?
Markup and profit margin both describe gross profit, but they answer different pricing questions. Learn the formulas, convert between them, and avoid a common pricing mistake.
The short answer
Markup
Profit as a percentage of cost. Use it when you start with cost and want to add a percentage.
Profit margin
Profit as a percentage of selling price. Use it to measure how much of each sales dollar is gross profit.
Markup-to-margin converter
Choose the percentage you know to see its equivalent. This converter assumes a positive selling price and cost.
For example, 25% markup equals 20% profit margin.
Margin and markup formulas
First, calculate gross profit: Selling Price − Cost. The only difference is the number used as the denominator.
Markup formula
Markup = (Profit ÷ Cost) × 100
Profit margin formula
Margin = (Profit ÷ Selling Price) × 100
Three practical examples
Example 1
From cost to markup
A product costs $80. Add 25% markup: $80 × 1.25 = $100 selling price.
Profit: $20 · Margin: 20%
Example 2
Target a 30% margin
A service costs $70. Divide by 0.70: $70 ÷ 0.70 = $100 selling price.
Profit: $30 · Markup: 42.86%
Example 3
Check an existing price
An item costs $45 and sells for $60. Profit is $15.
Markup: 33.33% · Margin: 25%
Markup to margin conversion table
Use this quick reference when you set prices from cost but report profitability as a margin.
| Markup | Equivalent margin | $100 cost selling price |
|---|---|---|
| 10% | 9.09% | $110 |
| 20% | 16.67% | $120 |
| 25% | 20% | $125 |
| 30% | 23.08% | $130 |
| 40% | 28.57% | $140 |
| 50% | 33.33% | $150 |
| 75% | 42.86% | $175 |
| 100% | 50% | $200 |
| 150% | 60% | $250 |
| 200% | 66.67% | $300 |
How much markup do you need for your target margin?
Use this formula: Markup = Margin ÷ (100 − Margin) × 100. A 20% target margin needs 25% markup; a 40% target margin needs 66.67% markup; and a 50% target margin needs 100% markup.
Calculate a selling priceFrequently asked questions
What is the difference between margin and markup?
Markup expresses gross profit as a percentage of cost. Profit margin expresses gross profit as a percentage of selling price.
Is markup always higher than margin?
For a positive profit, yes. Markup uses the smaller cost figure as its base, while margin uses the higher selling price.
What markup equals a 30% margin?
A 30% profit margin requires approximately 42.86% markup.