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Margin vs Markup Calculator

Understand the critical difference between profit margin and markup. Convert between metrics, calculate selling price from cost, and avoid pricing mistakes. Free tool for business owners.

Last revised 2 September 2026

By Team GlobalCalqulate · About our editorial standards

Business Metrics

Calculation Mode

Cost ($)

Selling Price ($)

Margin (%)

Markup (%)

Decimal Places

Financial Disclaimer: This result is an educational estimate produced by applying a standard formula to the figures you entered. It is not an offer, a quotation, or financial advice: real costs and returns depend on a provider's pricing, fees and underwriting, and on circumstances this calculator does not collect. Confirm the figures with the provider or a qualified adviser before acting on them. Full disclaimer.

Sources & methodology

Formula:: Profit
Reference:: U.S. Small Business Administration (SBA)
Content last updated:: September 2026
Scheduled re-verification:: September 2027

Calculation type: Exact calculation. Figures are taken from U.S. Small Business Administration (SBA) — see sources below.

Your entries stay on this device. This calculator runs entirely in your browser — the figures you type are not sent to us or to anyone else. The page itself uses cookies for analytics and advertising, described in the privacy policy.

Formula & methodology

Formula used

Profit

profit = selling price − cost

The cash difference between what you pay and what you charge.

Margin

margin % = (selling price − cost) ÷ selling price × 100

Profit as a share of the SELLING price. Margin can never reach 100%.

Markup

markup % = (selling price − cost) ÷ cost × 100

Profit as a share of the COST. Markup is unbounded and can exceed 100%.

Converting between them

margin = markup ÷ (1 + markup);  markup = margin ÷ (1 − margin)

Using decimals rather than percentages. This is why a 50% markup is only a 33.3% margin.

Variable definitions

Symbol	Meaning	Unit
cost	Cost. what the item costs you	currency
price	Selling price. what you charge the customer	currency

Step-by-step calculation

1. Pick what you know
Enter cost and selling price, or a cost plus a target margin or markup.
2. Read both percentages
The calculator always shows margin and markup together so the two are not confused.

Limitations

This is a single-item calculation on the figures entered; it does not account for overheads, discounts, returns or sales tax.
Margin and markup are equal only at zero profit. Quoting one when a supplier or buyer means the other is a common and expensive mistake.

This page is educational. It applies a standard formula to the figures you enter and shows the arithmetic behind the result. It is an estimate, not an offer, a quotation or financial advice: real costs depend on the provider's pricing, fees and underwriting, and on circumstances this calculator does not collect.

Sources & references

Manage your business finances — small business financial fundamentals — U.S. Small Business Administration (SBA)

Help & FAQs

Frequently Asked Questions

Clear answers to common questions to help you use this calculator confidently.

What's the difference between margin and markup?

Tap to view the answer

Margin and markup both measure profit, but use different bases. Margin = (Profit ÷ Selling Price) × 100. Markup = (Profit ÷ Cost) × 100. Same profit, different denominators = different percentages. Example: $50 cost, $100 selling price = $50 profit = 100% markup but only 50% margin.

Can I convert between margin and markup?

Tap to view the answer

Yes. Margin % = (Markup % ÷ (100 + Markup %)) × 100. Markup % = (Margin % ÷ (100 − Margin %)) × 100. This calculator handles both conversions automatically — a 50% markup equals 33.3% margin.

What if margin and markup are the same?

Tap to view the answer

They're only equal when profit is 0%. For any positive profit, markup is always higher than margin. A 100% markup always equals 50% margin; a 50% markup always equals 33.3% margin.

How do I calculate the right selling price from a target markup?

Tap to view the answer

Use: Selling Price = Cost × (1 + Markup % ÷ 100). Example: $50 cost, 50% markup = $50 × 1.5 = $75. Then verify the resulting margin covers your operating costs.

What's gross profit margin vs net profit margin?

Tap to view the answer

Gross margin = (Revenue − Cost of Goods) ÷ Revenue. Net margin = (Revenue − all expenses − taxes) ÷ Revenue. This calculator computes gross margin; subtract operating costs, taxes, and debt separately to get net margin.

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How to Use This Calculator

Choose Input Mode

Select which two values you already know: Cost + Selling Price, Cost + Margin %, or Cost + Markup %.

Enter Your Numbers

Fill in the two known values. The calculator derives everything else — profit, the other metric, and conversion equivalents.

Review Both Metrics

See both margin and markup percentages side by side. Remember: 50% markup equals 33.3% margin — confusing them can cause severe underpricing.

Understanding Your Results

Margin
Profit ÷ Selling Price × 100. The percentage of revenue that is profit. A $50 profit on a $150 sale is 33.3% margin.
Markup
Profit ÷ Cost × 100. The percentage added to cost. A $50 profit on a $100 cost is 50% markup.
Conversion
Margin = Markup ÷ (1 + Markup). Markup = Margin ÷ (1 − Margin). 50% markup = 33.3% margin. 100% markup = 50% margin.

Key Tips

✓
Margin is always lower than markup for the same profit — confusing them leads to underpricing.
✓
Use markup for pricing decisions (what to charge above cost). Use margin for profitability analysis (what percentage of revenue you keep).
✓
50% markup = 33.3% margin; 100% markup = 50% margin. The gap widens as percentages increase.
✓
Check industry benchmarks: retail margins are typically 20-50%, software 70-90%.

Why Margin and Markup Aren't the Same

The Fundamental Difference

Margin and markup both measure profit, but from different bases. Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. For the same profit amount, margin will always be a lower number than markup. This matters because mixing them up in pricing decisions leads to charging less than intended. If you want a 40% margin on a product costing $100, you need to sell it at $167, not $140 (which would be a 40% markup = only 28.6% margin).

How to Convert Between Margin and Markup

Margin = Markup ÷ (1 + Markup). So 50% markup converts to 0.50 ÷ 1.50 = 33.3% margin. Markup = Margin ÷ (1 − Margin). So 33.3% margin converts to 0.333 ÷ (1 − 0.333) = 50% markup. Common conversions: 25% markup = 20% margin; 50% markup = 33% margin; 100% markup = 50% margin; 200% markup = 67% margin. The calculator handles these automatically — enter any two known values and it fills in the rest.

When to Use Each

Use markup when setting prices: 'I need to add X% to my cost to cover overhead and profit.' Use margin when analyzing profitability: 'What percentage of my revenue is actually profit?' Financial statements use margin (gross profit margin on P&L statements). Retail buyers often think in markup. The key: always be clear which metric you're using, and use the calculator to convert so you don't accidentally underprice.

Formulas Used by This Calculator

Profit = Selling Price − Cost. Markup % = (Profit ÷ Cost) × 100 (cost-based; used for pricing decisions). Margin % = (Profit ÷ Selling Price) × 100 (revenue-based; used for profitability analysis). To find selling price from a target markup: Selling Price = Cost × (1 + Markup% ÷ 100). To find selling price from a target margin: Selling Price = Cost ÷ (1 − Margin% ÷ 100).

Common Margin/Markup Mistakes

Assuming X% markup produces X% margin — a 20% markup on a $100 cost item ($120 selling price) is a $20 profit, but that's only 16.7% margin ($20 ÷ $120), not 20%. Forgetting indirect costs when defining 'cost' — shipping, quality control, packaging, and overhead allocation are real costs; leaving them out overstates margin and can lead to underpricing. Not re-pricing when supplier costs rise — if cost increases but selling price stays flat, margin erodes silently; recalculating the target selling price keeps margin on track. Adding markups across a supply chain without checking the final price — a manufacturer, wholesaler, and retailer each applying their own markup independently can compound into an uncompetitive final consumer price.

When to Use Margin vs Markup

Use markup when setting a price: 'I need to add X% to my cost to cover overhead and profit.' Use margin when analyzing profitability: 'What percentage of my revenue is actually profit?' Financial statements report gross profit margin, not markup, so margin is the number that matters for comparing profitability across periods or against industry benchmarks.

Limitations of This Calculator

This calculator computes margin and markup from whichever two values you provide — it does not know what belongs in 'cost' for your business, so if you omit shipping, packaging, platform fees, or overhead allocation, the resulting margin will overstate your real profitability. It also doesn't apply industry benchmarks automatically; what counts as a healthy margin varies widely by industry (grocery margins run in the single digits, software margins can exceed 70%), so compare your result to your own sector rather than a universal target.

Formula & methodology

Formula used

Profit

profit = selling price − cost

The cash difference between what you pay and what you charge.

Margin

margin % = (selling price − cost) ÷ selling price × 100

Profit as a share of the SELLING price. Margin can never reach 100%.

Markup

markup % = (selling price − cost) ÷ cost × 100

Profit as a share of the COST. Markup is unbounded and can exceed 100%.

Converting between them

margin = markup ÷ (1 + markup);  markup = margin ÷ (1 − margin)

Using decimals rather than percentages. This is why a 50% markup is only a 33.3% margin.

Variable definitions

Symbol	Meaning	Unit
cost	Cost. what the item costs you	currency
price	Selling price. what you charge the customer	currency

Step-by-step calculation

1. Pick what you know
Enter cost and selling price, or a cost plus a target margin or markup.
2. Read both percentages
The calculator always shows margin and markup together so the two are not confused.

Limitations

This is a single-item calculation on the figures entered; it does not account for overheads, discounts, returns or sales tax.
Margin and markup are equal only at zero profit. Quoting one when a supplier or buyer means the other is a common and expensive mistake.

Calculator inputs

Business Metrics

Your results

Sources & methodology

Formula & methodology

Formula used

Profit

Margin

Markup

Converting between them

Variable definitions

Step-by-step calculation

Limitations

Sources & references

What's the difference between margin and markup?

Can I convert between margin and markup?

What if margin and markup are the same?

How do I calculate the right selling price from a target markup?

What's gross profit margin vs net profit margin?

Related calculators

More everyday calculators

Calculator inputs

Business Metrics

Your results

Sources & methodology

How to Use This Calculator

Example: Cost $100, Selling Price $150

Understanding Your Results

Key Tips

Why Margin and Markup Aren't the Same

The Fundamental Difference

How to Convert Between Margin and Markup

When to Use Each

Formulas Used by This Calculator

Common Margin/Markup Mistakes

When to Use Margin vs Markup

Limitations of This Calculator

Formula & methodology

Formula used

Profit

Margin

Markup

Converting between them

Variable definitions

Step-by-step calculation

Limitations

Sources & references

How to Use This Calculator

Example: Cost $100, Selling Price $150

Understanding Your Results

Key Tips

Why Margin and Markup Aren't the Same

The Fundamental Difference

How to Convert Between Margin and Markup

When to Use Each

Formulas Used by This Calculator

Common Margin/Markup Mistakes

When to Use Margin vs Markup

Limitations of This Calculator