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Markup Calculator

Markup percentage, calculated as (Selling Price - Cost) / Cost x 100, expresses profit as a proportion of cost. A product that costs $40 and sells for $60 has a markup of ($60 - $40) / $40 x 100 = 50%. The related margin percentage uses the selling price as the denominator instead, yielding ($60 - $40) / $60 x 100 = 33.33%. Enter your cost and selling price below to find markup and margin instantly, or enter a cost and desired markup percentage to calculate the selling price.

Quick Answer

A product costing $40 with a selling price of $60 has a $20 profit, a 50% markup, and a 33.33% margin.

Find Markup from Prices

Calculate Price from Markup %

Common Examples

Input Result
$40 cost, $60 selling price $20 profit, 50.00% markup, 33.33% margin
$10 cost, $25 selling price $15 profit, 150.00% markup, 60.00% margin
$100 cost, $150 selling price $50 profit, 50.00% markup, 33.33% margin
$75 cost, 80% markup $135 selling price, $60 profit, 44.44% margin
$200 cost, 100% markup $400 selling price, $200 profit, 50.00% margin

How It Works

This calculator uses the standard markup and margin formulas:

Markup = Selling Price - Cost

Markup % = (Markup / Cost) x 100

Margin % = (Markup / Selling Price) x 100

Where:

  • Cost = the purchase price or production cost of the item
  • Selling Price = the price charged to the customer
  • Markup = the dollar amount added to cost (same as profit)
  • Markup % = profit expressed as a percentage of cost
  • Margin % = profit expressed as a percentage of selling price

Markup vs. Margin

Markup and margin both describe profitability but use different denominators. Markup divides by cost; margin divides by selling price. Because cost is always less than or equal to selling price (for profitable items), markup percentage is always greater than or equal to margin percentage for the same transaction. A 100% markup corresponds to a 50% margin. A 50% markup corresponds to a 33.33% margin.

Conversion formulas:

Markup % = Margin % / (1 - Margin % / 100) x 100

Margin % = Markup % / (1 + Markup % / 100) x 100

Reverse Calculation

To find the selling price from a known cost and desired markup percentage:

Selling Price = Cost x (1 + Markup % / 100)

This is useful when pricing products based on a target markup. For example, a 60% markup on a $50 cost yields a selling price of $50 x 1.60 = $80.

Worked Example

A retailer purchases inventory at $40 per unit and sells each unit for $60. Markup (dollar amount) = $60 - $40 = $20. Markup percentage = $20 / $40 x 100 = 50%. Margin percentage = $20 / $60 x 100 = 33.33%. The retailer adds 50% on top of the cost and retains 33.33 cents of every revenue dollar as gross profit. If the retailer wanted to price a $75 item at an 80% markup instead, the selling price would be $75 x 1.80 = $135, yielding $60 in profit and a 44.44% margin.

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Frequently Asked Questions

What is markup?
Markup is the amount added to the cost of a product to arrive at the selling price. Expressed as a percentage, it represents how much the selling price exceeds cost relative to the cost itself. A 50% markup on a $100 cost means the selling price is $150.
What is the difference between markup and margin?
Markup is profit divided by cost. Margin is profit divided by selling price. They describe the same profit from different perspectives. A 50% markup equals a 33.33% margin. A 100% markup equals a 50% margin. Markup is always a larger percentage than margin for any profitable sale.
How do I convert markup to margin?
Divide the markup percentage by (1 + markup percentage / 100), then multiply by 100. For example, a 60% markup converts to 60 / (1 + 0.60) x 100 = 60 / 1.60 x 100 = 37.5% margin.
What markup percentage should I use?
Markup varies by industry and business model. Retail clothing commonly uses 50% to 100% markup. Grocery stores may use 5% to 25%. Restaurants often apply 200% to 300% markup on food items. Jewelry stores may use 50% to over 200%. The appropriate markup depends on operating costs, competitive pricing, and target profit levels.
Can markup be negative?
Yes. A negative markup means the selling price is below cost, which represents a loss on the sale. This can occur during clearance events, loss-leader pricing strategies, or when a business needs to move obsolete inventory quickly.