Margin vs Markup Calculator
Calculate profit margin and markup from cost and price, or work backward to the selling price that hits a target margin or markup.
| Cost | — |
|---|---|
| Selling price | — |
| Profit per unit | — |
| Margin (profit ÷ price) | — |
| Markup (profit ÷ cost) | — |
In short
Margin is profit divided by selling price; markup is profit divided by cost. A 50% markup on a $100 cost gives a $150 price but only a 33% margin. To hit a target margin, price = cost ÷ (1 − margin).
Who this is for: Retailers, wholesalers and freelancers pricing products who need to tell margin from markup.
Margin and markup are not the same number
These two are the most commonly confused numbers in pricing, and mixing them up leads to under-pricing:
- Margin = profit ÷ selling price — the percentage of each sales dollar that's profit.
- Markup = profit ÷ cost — how much you added on top of what something cost you.
For the same profit amount, markup is always a bigger number than margin (except at 0%). A 50% markup on a $100 cost item gives a $150 price — but that's only a 33% margin, not 50%. Pricing a product to hit a "50% margin" using a 50% markup instead will leave real money on the table.
Formulas: Margin % = (Price − Cost) / Price × 100 and Markup % = (Price − Cost) / Cost × 100.
See also: UK VAT Calculator.
Assumptions
- Margin = profit ÷ price; markup = profit ÷ cost.
- Target-margin mode uses price = cost ÷ (1 − margin).
- Taxes and fees are not included.
Worked example
Price = Cost ÷ (1 − Margin%) = 100 ÷ (1 − 0.30) = $142.86
Profit = $42.86, which checks out as 42.86 ÷ 142.86 = 30.0% margin
Note this is a 42.9% markup on cost — a different number from the 30% margin target.
Frequently asked questions
Which one should I price with — margin or markup?
Margin is usually more useful for business planning, since it tells you directly what percentage of revenue is profit — which is what feeds into your overall profitability and matches how most financial statements are read. Markup is more common in retail/trade pricing conversations.
Can margin ever be 100% or more?
No — margin approaches but can never reach 100% (that would mean cost is zero), and can never exceed 100%. Markup, on the other hand, has no upper limit.
Does this include tax or payment fees?
No — this is a pure cost-vs-price calculation. If you sell through a marketplace or payment gateway, subtract those fees from your selling price first, or use a marketplace-specific fee calculator.
Is a 30% margin the same as a 30% markup?
No — a 30% margin needs a 42.9% markup; a 30% markup gives only a 23.1% margin.
What margin should a retail business aim for?
It varies widely by sector, but gross margins of 30–50% are common in retail, while grocery and electronics run much lower.
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