Margin and Markup Calculator
Set a price from a cost, or work backwards to see what you are really keeping. Margin and markup are not the same number, and this page shows both. Nothing is uploaded.
Enter the same percentage in both boxes above and the two prices come out different. That gap is the whole reason this page exists.
How to use it
- Use the first box when you know what share of the selling price you want to keep.
- Use the second when you think in terms of adding a percentage on top of cost.
- Use the third for an item you already sell, to see what your real margin is.
The difference that quietly costs money
Both numbers describe the same profit; they just divide it by different things. Markup divides profit by cost. Margin divides the same profit by the selling price. Buy at 100, sell at 150, and the 50 of profit is half of the cost but only a third of the price — a markup of 50% and a margin of 33.3%.
This is where the money leaks. A shop that wants a 40% margin but applies a 40% markup sells at 140 instead of 166.67, and keeps 28.6% instead of 40. On a year of sales that difference is not a rounding error.
Converting between them
Margin is 100 × markup ÷ (100 + markup), and markup is 100 × margin ÷ (100 − margin). A few worth remembering:
| Markup | Margin |
|---|---|
| 25% | 20% |
| 50% | 33.3% |
| 100% | 50% |
| 233% | 70% |
Notice that margin can never reach 100%, however large the markup gets. Selling at a 100% margin would mean the item cost you nothing. That is why the margin box on this page stops just short of 100.
Which one to use
Price with markup, because you start from a cost you already know. Report with margin, because it is the share of revenue you keep and it is the language of every profit and loss statement. Retailers and accountants quote margin; suppliers and wholesalers usually quote markup. When someone says “we work on 30%”, it is worth asking which one they mean.
Frequently asked questions
What is the difference between margin and markup?
They measure the same profit against different bases. Markup compares the profit to what the item cost you. Margin compares the same profit to what the customer paid. Buy at 100 and sell at 150 and that is a markup of 50 percent but a margin of 33.3 percent, because 50 is half of 100 but only a third of 150.
How do I convert markup to margin?
Margin equals one hundred times the markup, divided by one hundred plus the markup. A markup of 50 percent is a margin of 33.3 percent. Going the other way, markup equals one hundred times the margin divided by one hundred minus the margin, so a margin of 40 percent needs a markup of 66.7 percent.
Which one should I use for pricing?
Price with markup, because you start from a cost you already know. Report and compare with margin, because it is the share of revenue you actually keep and it is what every profit and loss statement uses. Confusing the two is how a business aiming for 40 percent ends up keeping 28.
Is anything I type sent anywhere?
No. The arithmetic happens in JavaScript inside your own browser. Nothing is uploaded and nothing is saved - close the tab and it is gone.