Markup Calculator
Enter your cost and selling price to calculate the markup percentage.
Enter values above to calculate results
Understanding Markup vs. Margin
Markup and margin are two essential pricing concepts that are often confused but represent fundamentally different calculations. Understanding the distinction between them is crucial for business owners, retailers, and anyone involved in pricing products or services. This calculator helps you work with both metrics to ensure accurate pricing decisions.
Markup is the percentage increase applied to the cost of a product to determine its selling price. It answers the question: by what percentage did I increase my cost to reach the selling price? The formula is simple: Markup = (Selling Price - Cost) / Cost x 100. For instance, if you purchase an item for $80 and sell it for $100, your markup is 25% because the $20 profit represents 25% of your $80 cost.
Margin, also known as profit margin or gross margin, represents the percentage of the selling price that constitutes profit. It answers: what portion of my revenue is profit? The formula is: Margin = (Selling Price - Cost) / Selling Price x 100. Using the same example, your margin would be 20% because the $20 profit represents 20% of the $100 selling price. Margin is always lower than markup for any profitable transaction.
This calculator provides three calculation modes to solve for any unknown variable. Whether you know your cost and want to apply a specific markup, need to determine what markup you achieved on a sale, or want to reverse-engineer the cost from a selling price, this tool displays all relevant metrics including both markup and margin percentages for complete pricing analysis.