Markup vs Margin Calculator
See markup and margin side by side from cost and price.
How markup and margin differ
Markup and margin both measure profit on a sale, but relative to different bases: markup is profit as a percentage of cost, while margin is profit as a percentage of price. Confusing the two is one of the most common pricing mistakes.
Enter your cost and selling price. The calculator returns both the markup percentage and the margin percentage, side by side.
Markup is always a larger number than margin for the same sale (except at 0%), because the same dollar profit is divided by a smaller base (cost) for markup than for margin (price).
The formula
Markup = (Price − Cost) ÷ Cost × 100. Margin = (Price − Cost) ÷ Price × 100.
Both use the same numerator (profit = price minus cost), but markup divides by cost while margin divides by price.
Worked example
$50 cost, $80 selling price
Profit = $30. Markup = $30 ÷ $50 × 100 = 60%. Margin = $30 ÷ $80 × 100 = 37.5%.
Frequently asked questions
Why are markup and margin always different?
Because they divide the same profit amount by different bases — cost for markup, price for margin. Price is always larger than cost when there's a profit, so margin is always the smaller percentage.
Which one should I use for pricing?
Markup is often used to set a price from a known cost. Margin is more useful for understanding what share of revenue is actually profit — many businesses track both for different purposes.
How do I set a price for a target margin?
Divide cost by (1 − target margin as a decimal). For example, for a 40% margin on a $50 cost: $50 ÷ (1 − 0.40) = $83.33.
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