Markup Calculator
Find profit, markup percent, and margin percent from cost and price.
What it does
Markup and margin both describe profit on a sale, but they divide by different numbers. Knowing both helps you price products and compare profitability.
The tool above takes cost and price, then shows profit, markup percent, and margin percent. Enter your numbers and read the result.
Markup divides profit by cost: how much you add on top of what you paid. Margin divides profit by price: how much of the selling price is profit.
For the same sale, markup always reads higher than margin because cost is smaller than price when profit is positive.
How to use
- Enter the cost to make or buy the item.
- Enter the price you charge for the item.
- Read profit first.
- Read markup percent next.
- Read margin percent last.
Formula
- cost
- Cost to make or buy one item, in dollars.
- price
- Selling price of one item, in dollars.
- profit
- Price minus cost, in dollars.
- markup
- Profit divided by cost, as a percent.
- margin
- Profit divided by price, as a percent.
If cost is zero, markup is undefined and the tool shows it as not applicable. Price must be above zero.
Worked example
Example: $40 cost, $60 price
Cost 40, price 60.
- Profit: 60 - 40 = $20.00.
- Markup: 20 / 40 x 100 = 50 percent.
- Margin: 20 / 60 x 100 = 33.33 percent.
- Tool shows profit $20.00, markup 50%, margin 33.33%.
Reference table
| Cost | Profit | Markup | Margin |
|---|---|---|---|
| $30 | $30.00 | 100% | 50.00% |
| $40 | $20.00 | 50% | 33.33% |
| $50 | $10.00 | 20% | 16.67% |
| $45 | $15.00 | 33.33% | 25.00% |
Limits
- This is a per-unit model with one cost and one price.
- It does not include fixed costs, overhead, taxes, or discounts.
- Volume pricing and bundles are not modeled.
- Profit here is gross profit per unit, not net income.
Common mistakes
- Confusing markup with margin; they answer different questions.
- Using price as the base for markup instead of cost.
- Assuming a 50% markup means a 50% profit margin.
- Ignoring overhead and fixed costs when setting price.
- Entering a cost above price, which gives negative profit.
Try it yourself
Quick checks. Answers sit tucked under each question.
$30 cost, $45 price?
Profit $15.00, markup 50%, margin 33.33%.
$20 cost, $50 price?
Profit $30.00, markup 150%, margin 60%.
$100 cost, $150 price?
Profit $50.00, markup 50%, margin 33.33%.
Questions
What is markup?
Profit divided by cost, as a percent. It shows how much you add on top of cost.
What is margin?
Profit divided by price, as a percent. It shows how much of the price is profit.
Why is markup higher than margin?
Because cost is smaller than price when profit is positive, so dividing by cost gives a larger percent.
Which should I use to price?
Retailers often use markup; manufacturers and analysts often use margin. Pick one and stay consistent.
Is this gross or net profit?
Gross profit per unit. Overhead, taxes, and other costs are outside this math.
Can cost be zero?
Markup is undefined at zero cost, so the tool flags it.