Margin and Markup Calculator
Convert between profit margin and markup percentage instantly. Enter cost and selling price, or use a target margin or markup to calculate the other values. Understand the difference between margin and markup for smarter pricing decisions.
Enter Values
What you pay for the product or service
Margin = (Revenue − Cost) / Revenue
The price you charge your customer
Example Percentages (not industry benchmarks)
Results
of revenue
of cost
per unit sold
Revenue / Cost ratio
Bars show only the 0–100% range. Read the numbers for negative, larger or undefined values.
Margin ↔ Markup Quick Reference
| Margin | Markup | Multiplier |
|---|---|---|
| 10% | 11.11% | 1.11x |
| 15% | 17.65% | 1.18x |
| 20% | 25% | 1.25x |
| 25% | 33.33% | 1.33x |
| 30% | 42.86% | 1.43x |
| 33.33% | 50% | 1.5x |
| 40% | 66.67% | 1.67x |
| 50% | 100% | 2x |
| 60% | 150% | 2.5x |
| 75% | 300% | 4x |
What Is Margin vs Markup?
Margin and markup are two ways to express the relationship between cost and selling price, but they use different bases for the calculation. Understanding the distinction is critical for pricing, profitability analysis, and financial reporting.
Profit margin (or gross margin) is the percentage of revenue that is profit. It answers the question: “Of every dollar I collect, how many cents are profit?”
Markup is the percentage added on top of cost to arrive at the selling price. It answers: “How much did I add to my cost?”
Margin and Markup Formulas
Margin (%) = ((Revenue − Cost) / Revenue) × 100Markup (%) = ((Revenue − Cost) / Cost) × 100Markup (%) = 100 × Margin (%) / (100 − Margin (%))Margin (%) = 100 × Markup (%) / (100 + Markup (%))How to Use This Margin and Markup Calculator
- Enter your cost price: This is the amount you pay for the product, raw materials, or service delivery.
- Choose your mode: Select “Calculate from Margin” if you know your target profit margin, or “Calculate from Markup” if you know your target markup percentage.
- Enter margin or markup: Type your target percentage, or use a hypothetical percentage preset.
- Or enter revenue directly: If you already know both cost and selling price, enter them to see the resulting margin and markup.
- Read your results: See profit margin, markup percentage, gross profit, revenue, and the price multiplier instantly.
Why Margin and Markup Matter
Confusing margin with markup is one of the most common pricing mistakes in business. A 50% markup does not produce a 50% margin — it produces a 33.3% margin. This difference can significantly impact profitability, especially at scale.
Set selling prices that meet your profitability targets. Know exactly what margin you earn at any price point.
Gross margin is a key metric on income statements. Investors and analysts use it to evaluate business health.
Quickly convert between margin and markup during supplier or client negotiations to protect your bottom line.
Compare your margins against industry benchmarks to identify opportunities for improvement.
Margin vs Markup: A Common Example
Suppose you buy a product for $50 and sell it for $100:
- Profit: $100 − $50 = $50
- Margin: $50 / $100 = 50% (profit as a share of revenue)
- Markup: $50 / $50 = 100% (profit as a share of cost)
The same $50 profit is expressed as 50% margin or 100% markup. For a positive profit and positive cost, markup is greater than margin. At break-even both are zero; at zero cost, markup is undefined.
Scope and Sources
Use cost and selling price for the same unit or period, on a consistent tax basis. The dollar symbol is a display convention; no exchange-rate conversion occurs. This tool does not calculate an unknown cost from arbitrary pairs of inputs or determine a market-clearing price.
The presets are arithmetic scenarios, not industry averages. Gross profit excludes any expenses absent from your cost input.
Business Victoria: margin and markup formulas
FAQs
What is the difference between margin and markup?
Margin divides profit by selling price; markup divides profit by cost. At cost 50 and selling price 100, profit is 50, margin is 50% and markup is 100%.
How do I convert percentages?
Using percentage numbers, markup % = 100 × margin % / (100 − margin %), and margin % = 100 × markup % / (100 + markup %). A 40% margin is about 66.67% markup.
Can I use zero cost or zero profit?
For a positive selling price and zero cost, margin is 100%, but markup and the revenue/cost multiplier are undefined. With positive cost, a 0% target margin or markup gives a selling price equal to cost. Negative targets model selling below cost.
Are the presets industry benchmarks?
No. They are hypothetical percentage scenarios. This page has no dataset of industry margins and cannot determine an appropriate price or profit target for your business.
Does gross profit include all expenses?
The result subtracts only the cost you enter. If that is cost of goods sold, the result is gross profit before other expenses. It is not a forecast of net income or evidence that customers will accept the calculated price.
Is the calculator free?
Yes. The calculator requires no sign-up and performs these arithmetic calculations in your browser.
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