Markup & Margin Calculator
Price products correctly by converting between cost, sell price, markup percentage (on cost), and profit margin percentage (on sell). Essential for retail, wholesale, and freelance pricing.
Written and maintained by Ricardo Rodrigues · Last updated · What changed
Who this calculator is for
This page is for people who set a price from a cost: a retailer, a freelancer, a wholesaler, a student in a pricing exercise. It converts among cost, selling price, markup on cost, and margin on price. The two percents are not rivals. They are two names for one pile of profit, divided by different bases. A conversation that says “we work on 25” has not started until someone says 25 of which.
It is not a VAT tool. A selling price here is whatever you type. If that number still has tax inside it, the margin will look thinner than the margin on the net price. Strip tax first when you mean to compare net with net.
Markup & Margin Calculator
Convert between cost, sell price, markup %, and profit margin %
Mode
Result
$70.00
Markup $20.00 · Margin 28.57%
Sell = cost × (1 + markup%/100) = 50.00 × (1 + 40/100)
Step-by-step for your numbers
- Markup amount = 40% of cost = 50.00 × 0.4 = 20.00.
- Sell price = cost + markup = 50.00 + 20.00 = 70.00.
- Margin = profit ÷ sell = 20.00 ÷ 70.00 = 28.57%. Same profit, bigger base, smaller percent.
Comparison table
| Markup | Sell price (cost 100) | Margin |
|---|---|---|
| 10% | 110 | 9.09% |
| 20% | 120 | 16.67% |
| 25% | 125 | 20% |
| 33.33% | 133.33 | 25% |
| 50% | 150 | 33.33% |
| 100% | 200 | 50% |
Margin is always smaller than the markup that produced it, because margin divides the same profit by the larger sell price.
About this markup / margin
Markup and margin are two percents for one pile of profit. Markup divides profit by cost. Margin divides profit by the selling price. A €50 cost with a 40% markup sells for €70 and earns about a 28.6% margin. A 40% margin on the same cost sells for about €83.33. The calculator will do either, and it will not guess which percent you meant.
Put every cost you actually bear into the cost field before you apply a target percent: materials, a subcontractor, a fee you cannot pass through. A pretty margin on an incomplete cost is a thin margin in the bank.
How to use each field
- Markup on cost
- You know the cost and the markup percent. Sell = cost × (1 + markup/100). Cost 50 and markup 40% sell for 70. Profit is 20. Margin is 20/70 ≈ 28.57%. The mode is doing the multiply.
- Margin on sell
- You know the cost and the margin you want on the price. Sell = cost ÷ (1 − margin/100). Cost 50 and margin 40% sell for 50 / 0.60 ≈ 83.33. Profit is about 33.33, and the markup on cost is about 66.67%. Using the multiply key here is the expensive mistake: cost × 1.40 is a 40% markup, not a 40% margin.
- From cost and sell
- You already have both money figures and you want the two percents named. Cost 80 and sell 100: profit 20, markup 25%, margin 20%. This mode will not tell you whether the price is wise. It will stop a meeting from using one word for both ratios.
- Cost
- Everything you actually bear before the percent: materials, a subcontractor, a fee you cannot pass on. Leave a cost out and the margin you see is a story about a thinner cost than the one you pay. The field is a single number. Add the pieces before you type them if you need them included.
When to use this calculator
- You know your cost and a target markup or a target margin and you need a price before you quote it.
- You know cost and a competitor’s price and you want the margin that price would imply for you.
- Someone said “we work on 25” and you need to see both interpretations before you agree.
Worked examples
| Question | Answer |
|---|---|
| Cost $50 with 40% markup | Sell $70 · Margin ~28.57% |
| Cost $50 with 40% margin | Sell $83.33 · Markup ~66.67% |
| Cost $80 sell $100 | Markup 25% · Margin 20% |
Walkthroughs
A day rate and a 25 that might mean either thing
Your cost for a day, counting the software seat and the subcontracted illustrator you always need, is €320. The client says industry margin is 25%. If they mean margin, sell = 320 / 0.75 ≈ 426.67, profit ≈ 106.67, markup ≈ 33.33%. If they mean markup, sell = 320 × 1.25 = 400, profit = 80, margin = 20%. The gap between those quotes is €26.67 a day. On a ten-day job that is €266.67, which is large enough to be worth the clarifying question and too small for either side to notice if nobody runs both modes.
A product that looks fine until VAT is stripped
You buy a good for €40 net and see it on a shelf at €73.80 in a place with 23% VAT included. The net shelf price is 73.80 / 1.23 = 60. Profit on a net basis is 20, markup is 50%, margin is 20/60 ≈ 33.33%. If you instead treat 73.80 as the sell price, profit looks like 33.80 and margin looks like 45.8%, which credits you with the tax. The VAT calculator’s extract mode is the step before this one whenever the tag is the amount a customer pays.
Formula
| Goal | Formula |
|---|---|
| Sell from markup | cost × (1 + markup%/100) |
| Sell from margin | cost ÷ (1 − margin%/100) |
| Margin % | (sell − cost) ÷ sell × 100 |
| Markup % | (sell − cost) ÷ cost × 100 |
Profit = sell − cost. Markup = profit ÷ cost × 100. Margin = profit ÷ sell × 100. From those, sell-from-markup multiplies and sell-from-margin divides by the cost fraction that remains. A 40% margin means 60% of the price is cost, so you divide by 0.60. A 40% markup means profit is 40% of cost, so you multiply by 1.40. Same adjective, different base, different price: 70 versus about 83.33 on a cost of 50.
Margin cannot reach 100% while cost is positive, because that would require the price to be all profit and the formula divides by zero. Markup can pass 100% without drama. Selling a 20 cost for 50 is a 150% markup and a 60% margin. If a target margin field refuses to behave as you get close to 100, the formula is telling you the price would have to run away.
Channel markups stack as separate steps. You sell to a shop at your price, which is their cost. Their markup applies to that cost, not to yours. Adding your margin percent to their margin percent does not describe the shelf. Compute your price, then compute theirs. VAT, if it is charged on the shelf, sits on top of the net price and should be removed before you compare margins.
Mistakes this page will not catch for you
Multiplying cost by one plus the margin
Cost × 1.40 is a 40% markup. A 40% margin divides by 0.60. Using the multiply key for a margin target underprices the work relative to the rule you stated.
Leaving VAT inside the selling price
A VAT-inclusive shelf price makes the same profit look like a smaller margin, because you divided by a tax-inflated price. Strip the tax, then compare net with net.
Leaving a cost out because it is “overhead”
A margin target on materials only is a materials margin. Rent, payment fees, and the hour you spent packing are real costs. If they are not in the cost box, they come out of the profit the percent just promised you. Either include them or stop calling the result the margin of the business.
FAQ
- What is the difference between markup and margin?
- Markup is profit divided by cost. Margin is profit divided by sell price. A 50% markup on $100 cost is $150 sell (33.3% margin). They are not the same percentage.
- How do I calculate sell price from margin?
- Sell price = cost ÷ (1 − margin%/100). For a 40% margin on $50 cost: 50 ÷ 0.6 ≈ $83.33.
- Why can’t margin reach 100%?
- A 100% margin would mean cost is zero and the entire price is profit, so the price formula divides by zero. Markups can exceed 100% without trouble: selling €20 of cost for €50 is a 150% markup and a 60% margin.
- Does a shop’s markup stack with mine?
- Each business applies its percent to its own cost. Your margin on the wholesale price is not the retailer’s margin on the shelf price. Compute them as two steps, not as a sum of percents.
- Which percent should a price list use?
- Use whichever one your supplier, your accountant, or your own rule named, and label it. Markup is the natural multiply when you build up from an invoice. Margin is the natural figure when you think about what share of the customer’s money is profit. Reporting both, from the cost-and-sell mode, prevents the meeting from averaging them.
- Why is a 50% markup only a 33% margin?
- Because the profit is half the cost and one third of the price. Cost 100, markup 50%, sell 150, profit 50. 50/100 = 50% markup. 50/150 ≈ 33.33% margin. Same 50. Different denominator.
- Does this include payment-processor fees?
- Only if you folded them into cost or reduced the sell price before you typed it. A 3% fee on the amount the customer pays is not a 3% markup. It is a bite out of the sell price. Approximate it by using the money you actually receive as the sell price.
Guides that go with this calculator
- Markup vs Margin ExplainedWhy a 40% markup is not a 40% margin, with the two formulas, a conversion table, and the pricing mistakes that erase a freelance profit.
- How to Calculate VATAdd VAT to a net price or remove it from a gross price, with European rate examples, a gross-versus-net table, and the mistakes that overstate tax.
- How to Calculate PercentagesThe four everyday percentage formulas — percent of, reverse percent, apply a change, and change from A to B — with worked numbers and the base each one uses.
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