Because margin is based on price and markup on cost, the same profit gives a smaller margin than markup: 25% markup = 20% margin; 100% markup = 50% margin.
How to use the Margin and Markup Calculator
- I know the
- Percentage
- Cost
Results update as you type, and every field accepts the units shown in its menu.
How it works
Choose what you know, enter the percentage and, optionally, the cost.
Tips
- Know the difference between margin (profit ÷ price) and markup (profit ÷ cost).
- Apply successive discounts one after another – they do not simply add up.
- Check whether prices already include sales tax or VAT.
- Round prices only at the very end of the calculation.
Common mistakes to avoid
- Adding discount percentages together.
- Pricing from a target margin using the markup formula.
- Forgetting payment-processing and shipping fees.
Inputs explained
| Field | What to enter |
|---|---|
| I know the | Choose one: Markup, Margin |
| Percentage | In % |
| Cost | Amount in your currency |
What each result means
- Selling price = [Cost]×(1 + [Markup]÷100)
- Profit = [Selling price] – [Cost]
Example values
How the main result changes when Percentage changes and everything else stays at the example values above:
| Percentage (%) | Margin (%) |
|---|---|
| 20 | 16.67 |
| 30 | 23.08 |
| 40 | 28.57 |
| 50 | 33.33 |
| 60 | 37.5 |
| 80 | 44.44 |
Formula
Margin = markup ÷ (1 + markup)Markup = margin ÷ (1 − margin)Price = cost × (1 + markup) = cost ÷ (1 − margin)Worked example
Inputs — I know the: Markup; Percentage: 40 %; Cost: $100.
Results — Margin = 28.57 %; Markup = 40 %; Selling price = $140.00; Profit = $40.00.
Frequently asked questions
Is 40% markup the same as 40% margin?
No – 40% markup is a 28.6% margin.
How do I convert margin to markup?
Markup = margin ÷ (1 − margin).
Which should I use?
Margin for profitability analysis; markup is convenient for pricing from cost.
What formula does the Margin and Markup Calculator use?
Margin = markup ÷ (1 + markup).