Markup is a percentage added to your cost. Margin is the percentage of the selling price that is profit. Enter cost and the markup you want to apply.
Calculation details
Planning estimate only, not financial, tax, or legal advice. Verify assumptions and current rules before making decisions.
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Use this result
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What does this calculator estimate?
An item costing $80 sold at $100 has a 25 percent markup and a 20 percent margin. Markup = (price - cost) / cost x 100; margin = (price - cost) / price x 100.
- Markup divides profit by cost; margin divides by price (Wikipedia).
- A 25 percent markup is a 20 percent margin.
- Pricing teams use margin for profitability and markup for price setting.
Markup vs margin — the common confusion
Markup is profit as a share of cost; margin is profit as a share of price. They're different numbers: a 50% markup is only a 33% margin. Pricing systems and accounting use them in different places, so converting correctly matters.
Limitations to watch for
Mixing them up under-prices or over-prices: adding 25% to cost is not a 25% margin. The tool handles the conversion. Sales, discounts, and taxes apply on top of the base pricing.
How to use it in practice
Set prices from cost using markup, but track business health in margin. To hit a target margin, use the margin form: price = cost ÷ (1 − margin %).
['Enter the cost and selling price.', 'Or enter the desired markup/margin.', 'Read both percentages.']
What percentage markup means
Markup is the amount added to cost as a percentage of cost: a 50 percent markup on $40 adds $20, pricing at $60. The calculator returns the price from cost and markup, and the markup from cost and price.
Markup vs. margin
Markup is profit ÷ cost; margin is profit ÷ price. A 50 percent markup is a 33 percent margin — the same dollars, different denominators. The calculator shows both so the labels never mislead.
A worked example
Cost $25, 40 percent markup: price = $35, profit $10, margin 28.6 percent. The calculator returns price, profit, and the equivalent margin.
Standard markups by industry
Retail commonly marks up 50–100 percent; restaurants 200–300 percent on food cost; services price by rate, not markup. Industry norms set the starting point; the calculator does the arithmetic.
Markup chains
A distributor's markup stacks on a manufacturer's price, then the retailer's markup stacks again. A 30 percent distributor markup plus 50 percent retail markup multiplies: 1.3 × 1.5 = 1.95 — a 95 percent total increase. The calculator handles each layer.
How this calculator works
Formula
Markup = (selling price − cost) ÷ cost × 100. Margin = (selling price − cost) ÷ selling price × 100. The tool converts between the two.
Worked example
An item costing $80 sold at $100: markup = 25%, margin = 20%.
Assumptions to verify
- Cost is the total product cost.
- Selling price is before tax and discounts.
- The conversion follows standard formulas.
Frequently asked questions
What's the difference between markup and margin?
Markup is profit ÷ cost; margin is profit ÷ price. $80 cost at $100 sale = 25% markup, 20% margin.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup): 25% markup → 20% margin.
How do I convert margin to markup?
Markup = margin ÷ (1 − margin): 20% margin → 25% markup.
Why do people confuse them?
Both are 'percentages of profit' — but on different bases (cost vs price). The difference grows with the percentage.
How do I price for a target margin?
Price = cost ÷ (1 − margin): $80 ÷ 0.80 = $100 for a 20% margin.
Which should I track?
Margin for business health (it's the share of revenue you keep); markup for pricing from cost.
Do discounts affect this?
Yes — a discount comes out of the price, so it reduces margin dollar-for-dollar.
How do I calculate markup?
Profit ÷ cost × 100: $10 profit on $25 cost = 40%.
What is the difference between markup and margin?
Markup divides by cost; margin divides by price.
How do I price from markup?
Cost × (1 + markup): $25 × 1.4 = $35.
Do markups stack?
Yes — each channel layer multiplies the previous price.
Cite this tool
BoringToolsKit. “Percentage Markup Calculator.” boringtoolskit.com/percentage-markup-calculator/ (reviewed 2026-08-25). Free to reference in articles, syllabi, and answer posts with a link.
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