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Markup vs Margin Calculator

Convert between markup and margin, find the selling price for a target margin, or check what your markup percentage translates to as a margin. Two different denominators, same dollar of profit.

What do you have?

Enter what you sold for and what it cost you. The calculator shows the same dollar of profit expressed as both a margin and a markup.

Selling price
$0.00
Profit (price − cost)
$0.00
Margin (% of price)
—
Markup (% of cost)
—

Margin uses the selling price as the denominator. Markup uses the cost. Same dollar of profit, two different percentages.

How this is calculated

Margin and markup describe the same dollar of profit from two different angles. Margin divides profit by the selling price; markup divides profit by the cost. They are always different numbers.

  1. 1.Profit

    selling price − cost

    Negative when cost exceeds price (a loss).

  2. 2.Margin %

    ( profit ÷ selling price ) × 100

    Not calculable when selling price = 0 — em-dash.

  3. 3.Markup %

    ( profit ÷ cost ) × 100

    Not calculable when cost = 0 — em-dash.

  4. 4.Target margin → price

    cost ÷ ( 1 − target margin / 100 )

    Target margin must be < 100% — at 100% the formula divides by zero, meaning an infinite price.

  5. 5.Cost + markup → price

    cost × ( 1 + markup / 100 )

Same profit, different denominator: 50% markup = ~33% margin; 100% markup = 50% margin; 50% margin = 100% markup.

Three quick conversion examples

When margin is the right number to use

Margin tells you what percentage of every dollar you collect actually stays as profit. It is bounded by 100% and ties directly to financial reporting — your profit and loss statement's gross-margin and net-margin lines are calculated the same way. Use margin when:

When markup is the right number to use

Markup is more natural when you start from a known cost and add a percentage to arrive at a price. That is how most contractors, retailers, restaurateurs, and many trades think about pricing. Use markup when:

Tracking it month over month

A single-transaction calculation only tells you about that transaction. The bigger question — is your business actually profitable when you look at every month, every category, every line item — is what a profit and loss statement is for. If you are not already tracking gross margin and net margin monthly, the Profit & Loss Statement Templates include formula-enabled Excel sheets that do the math automatically as you fill in revenue and expense line items.

Track margins month over month

Profit & Loss Statement Templates

Professional P&L with Current Period, Prior Period, YTD, and % Change columns — complete with balance sheet and AR tracker

$19.99View P&L Templates →

Related calculators and guides

FAQs

What is the difference between margin and markup?
They describe the same dollar of profit from two different angles. Margin divides profit by the selling price (so it is bounded by 100%). Markup divides profit by the cost (so it can exceed 100%). A product that costs $40 and sells for $100 has a 60% margin ($60 ÷ $100) and a 150% markup ($60 ÷ $40). Both numbers describe the same $60 of profit.
Why do they get confused so often?
Because both are expressed as percentages and both grow when prices rise relative to costs. The confusion usually shows up in pricing conversations: a supplier may quote "a 50% margin" when they mean "a 50% markup," and the buyer applies the wrong formula. The two numbers can be off by 50–100% of each other in either direction, so the price difference is meaningful.
Which one should my business use?
Use the one that matches how you actually price. Retail and many trades use markup because they think in terms of "cost plus." Restaurants, SaaS, and most accounting reporting use margin because they think in terms of "what percent of revenue do I keep." The calculator shows both either way so you can convert between them.
Is a 50% markup the same as a 50% margin?
No. A 50% markup is a 33% margin. A 50% margin is a 100% markup. The denominators are different (cost vs price), and the two never produce the same number unless both are 0. If a supplier quotes a 50% margin and you respond with a 50% markup, the resulting price is materially different.
What if my selling price is zero?
Margin cannot be calculated — division by zero. The calculator returns an em-dash in that case rather than NaN. Markup is still calculable as long as cost is greater than zero (it would be −100%, indicating you sold below cost).
Where does this calculator stop being useful?
When you need net margin (after overhead, salaries, rent, taxes — everything). This calculator does gross margin/markup on a single line item. For the full month-over-month financial picture, use a profit and loss statement template.

Related searches

profit margin calculatorbreak-even calculatorjob cost calculatorprofit and loss templateP&L statement guidefinance templates

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