Margin and markup calculator
Turn a cost and a price into margin and markup, or find the price for a target margin or markup.
How to use
Margin and markup describe the same profit, the selling price minus the cost, but measure it against different amounts: margin divides it by the selling price, markup by the cost. That is why the markup is always the larger figure for the same product, and why mixing the two up leads to prices that are too low.
The formulas: profit = selling price − cost. Margin = profit ÷ selling price, and markup = profit ÷ cost. For a target margin, selling price = cost ÷ (1 − margin); for a markup, selling price = cost × (1 + markup). To convert, margin = markup ÷ (1 + markup) and markup = margin ÷ (1 − margin).
Choose what you know: the cost and the selling price, the cost and the margin you want, or the cost and a markup. The calculator shows the selling price, the profit per unit and both percentages.
The margin here is a gross margin: only the cost you enter is taken off the selling price, usually the purchase or production cost of one unit. Rent, salaries and other fixed costs still have to be paid out of it; the break-even calculator shows how many units that takes.
Use prices and costs without VAT or sales tax.
Example
The example: a cost of 50 and a target margin of 25% give a selling price of 50 ÷ 0.75 = 66.67, a profit of 16.67 per unit and a markup of 33.33%.
Cost 20, price 28A profit of 8: a margin of 8 ÷ 28 = 28.57% and a markup of 8 ÷ 20 = 40%.Cost 20, target margin 40%Price 20 ÷ (1 − 0.40) = 33.33, a markup of 66.67%.Cost 20, markup 30%Price 20 × 1.30 = 26, a margin of 6 ÷ 26 = 23.08%.
Frequently asked questions
Is a 30% markup the same as a 30% margin?
No. A 30% markup on a cost of 20 gives a price of 26 and a margin of 23.08%. For a 30% margin the price has to be 20 ÷ 0.70 = 28.57, which is a markup of 42.86%.
Why can a margin never reach 100%?
Because the margin is a share of the selling price, and 100% would mean the product cost nothing. A markup has no upper limit: a markup of 200% triples the cost.
What does a negative margin mean?
That the selling price is below the cost, so each sale loses money. The calculator shows it when the price you enter is lower than the cost.
Which one should I use?
Either works as long as everyone involved uses the same one. Financial statements report margins, as a share of sales, so when a percentage has no label, ask whether it is a margin or a markup.