Markup Calculator
Calculate selling price and profit from cost plus markup percentage.
How is markup calculator worked out?
Markup is profit expressed as a percentage of cost. Selling price equals cost multiplied by one plus the markup percentage — so a 50% markup on a cost of 100 gives a selling price of 150 and a profit of 50.
Markup Calculator
Selling price
$150.00
- Profit
- $50.00
- Margin this produces
- 33.33%
- Profit as a share of the selling price — always lower than the markup.
Show the working
| Cost | $100.00 |
| Markup at 50% of cost | $50.00 |
| Selling price | $150.00 |
Markup and margin are different percentages describing the same money, and confusing them is one of the most expensive arithmetic mistakes in small business. A 50% markup is a 33.3% margin. Pricing at what you think is a 50% margin by adding 50% to cost leaves you a third short of where you meant to be, on every single sale.
The formula
Selling price = cost × (1 + markup % ÷ 100)
Profit = selling price − cost
Margin % = profit ÷ selling price × 100The key line is the last one. Markup divides profit by cost; margin divides the same profit by the selling price. Because the selling price is always larger than the cost, the margin percentage is always smaller than the markup percentage — and the gap widens as prices rise.
Markup and margin are not interchangeable
A few conversions worth memorising: a 25% markup is a 20% margin, a 50% markup is a 33.3% margin, a 100% markup is a 50% margin, and a 200% markup is a 66.7% margin. If someone tells you an industry "works on 40%", it is worth asking which one they mean before you price anything — the difference between a 40% markup and a 40% margin on a cost of 100 is a selling price of 140 versus 167.
What belongs in cost
Markup applied to an incomplete cost produces a price that looks profitable and is not. For products, cost should include what you paid plus freight, duty and any wastage. For services, it should include the labour hours at their real loaded cost, not the wage. Where you carry costs that cannot be attributed to a single sale — software, insurance, premises — those come out of the margin, which is why a markup that merely covers direct cost plus a little tends to lose money once the year is totalled.
Frequently asked questions
How do you calculate markup?
Multiply your cost by one plus the markup percentage expressed as a decimal. A 30% markup on a cost of 200 gives 200 × 1.30 = 260, a profit of 60.
What is the difference between markup and margin?
Both describe the same profit, but against different bases. Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. Because the selling price is higher than the cost, the margin is always the smaller number — a 50% markup is a 33.3% margin.
How do I convert markup to margin?
Divide the markup by one hundred plus the markup, then multiply by 100. A 60% markup converts to 60 ÷ 160 × 100 = 37.5% margin.
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