Markup vs. Margin Calculator
These two are easy to confuse — markup is a percentage of cost, margin is a percentage of selling price. This tool computes both from cost and selling price.
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How to calculate markup and margin
- Enter what the item costs you.
- Enter its selling price.
- Read the profit, the markup percentage and the margin percentage.
The difference
Markup is profit as a percentage of cost: (price − cost) ÷ cost × 100. Margin is profit as a percentage of the selling price: (price − cost) ÷ price × 100. The two numbers are always different (except at 0%) — a 50% markup is only a 33.3% margin.
Questions about markup and margin
What is the difference between markup and margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. Buy at £10 and sell at £15: markup 50%, margin 33.3%.
How do I convert markup to margin?
Margin = markup ÷ (100 + markup) × 100. A 100% markup is a 50% margin.
What selling price gives a 40% margin?
Divide the cost by 0.6 (1 − 0.4). An item costing £30 sells for £50.
Which one should I use?
Retailers often price with markup; accountants and investors usually talk about margin. Just be clear which one you mean.