Margin and Markup Calculator
The calculator converts between three numbers: cost, selling price and profit percentage. Give it a cost and a price and it returns both margin and markup; give it a cost and a target percentage and it returns the price.
Margin and markup describe the same profit measured against different bases, and mixing them up is the most common pricing mistake there is.
Margin, %
40%
Markup, %
66.7%
Profit per unit
400
Margin = (price − cost) ÷ price × 100
Markup = (price − cost) ÷ cost × 100
Margin is a share of the price, markup a share of the cost, so the same profit shows up as different percentages.
Formulas
- Profit = selling price − cost.
- Margin, % = profit ÷ selling price × 100.
- Markup, % = profit ÷ cost × 100.
- Price from margin = cost ÷ (1 − margin ÷ 100).
- Price from markup = cost × (1 + markup ÷ 100).
Margin and markup are different percentages
An item bought for 600 and sold for 1,000 earns 400. That profit is 40% of the selling price — the margin. The same profit is about 67% of the cost — the markup.
The practical rule follows: margin is always smaller than markup and can never reach 100%, because profit cannot exceed the price. Markup has no upper limit.
Conversion table
| Markup | Margin |
|---|---|
| 10% | 9.1% |
| 25% | 20% |
| 50% | 33.3% |
| 67% | 40% |
| 100% | 50% |
| 150% | 60% |
| 300% | 75% |
What the calculation leaves out
- Cost should include purchase, shipping and packaging, otherwise the margin comes out flattering.
- Marketplace fees, card processing and advertising cut real profit and are not part of this calculation.
- Handle tax separately: keep every figure either inclusive or exclusive, never mixed.
- Discounts reduce the selling price and therefore the margin: a 20% discount on a 1,000 price drops a 40% margin to 25%.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price; markup is profit as a share of the cost. A 400 profit on a 1,000 price is a 40% margin and a 67% markup.
How do I find the selling price for a target margin?
Divide the cost by (1 − margin ÷ 100). A cost of 600 at a 40% margin gives a price of 1,000.
Can margin be 100%?
No. A 100% margin would mean zero cost. As the target margin approaches 100% the price rises steeply, and at exactly 100% the formula breaks down.
What is a normal markup?
It depends entirely on the sector: grocery retail works in tens of percent, apparel and cosmetics in hundreds. Only compare within your own category.
Does the calculator include fees and tax?
No. Add fees to the cost or subtract them from the price to see the margin you actually keep.
Updated: 2026-08-09