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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—Profit
—Markup %
—Margin %

How to calculate markup and margin

  1. Enter what the item costs you.
  2. Enter its selling price.
  3. 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.

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