Calculation details
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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 20 percent margin and a 25 percent markup. Margin = (price - cost) / price x 100; markup = (price - cost) / cost x 100.
- Margin is profit divided by selling price (Wikipedia).
- Markup is profit divided by cost.
- A 25 percent markup equals a 20 percent margin, not the same number.
Why both numbers matter
Margin tells you what you keep from each sale; markup tells you how much you added to cost. Businesses quote both — suppliers in markup, retailers in margin — and converting between them prevents pricing mistakes.
Limitations to watch for
The formulas use profit before overhead — gross margin, not net. Fixed costs and volume change the picture. The tool assumes cost is total variable cost per unit.
How to use it in practice
Enter cost and price to see both metrics instantly. Use margin to evaluate your business, markup to set prices from cost. Target a margin, then compute the price: cost ÷ (1 − margin).
['Enter the cost.', 'Enter the selling price.', 'Read margin, markup, and profit.']
Margin vs. markup
Margin is profit ÷ revenue; markup is profit ÷ cost. A $50 item costing $30 has $20 profit: margin 40 percent, markup 66.7 percent. The two are routinely confused — the calculator shows both from the same inputs.
Why the difference matters
Pricing by markup and quoting margin produce different numbers: a 50 percent markup is only a 33 percent margin. Retailers quote margin; wholesalers often quote markup. Knowing which you are using prevents pricing errors.
A worked example
Cost $40, price $70: profit $30, margin 42.9 percent, markup 75 percent. To hit a 50 percent margin, the price must be double the cost — $80. The calculator runs both directions.
Pricing from margin
Price = cost ÷ (1 − target margin): at a 40 percent margin target, a $30 cost prices at $50. The calculator's reverse view returns the price for any margin.
Margin stacks in a business
Gross margin after product cost, operating margin after overhead, net margin after everything. Each layer is a different number; the calculator works at whichever layer you enter.
How this calculator works
Formula
Margin = (price − cost) ÷ price × 100. Markup = (price − cost) ÷ cost × 100. The tool reports both from cost and price.
Worked example
An item costing $80 sold at $100: 20% margin and 25% markup.
Assumptions to verify
- Cost is the per-unit total cost.
- Price is before tax and discounts.
- Overhead is handled separately.
Frequently asked questions
What's the difference between margin and markup?
Margin is profit ÷ price; markup is profit ÷ cost. $80 cost at $100 sale = 20% margin, 25% markup.
How do I calculate profit margin?
(Price − cost) ÷ price × 100: $20 ÷ $100 = 20%.
How do I calculate markup?
(Price − cost) ÷ cost × 100: $20 ÷ $80 = 25%.
Which number should I use?
Margin for business health; markup for pricing from cost. Know which one you're being quoted.
How do I set a price for a target margin?
Price = cost ÷ (1 − margin): $80 ÷ 0.80 = $100 for 20%.
Is this gross or net margin?
Gross — before overhead. Net margin subtracts operating costs.
Why does my supplier quote markup but my store tracks margin?
Different conventions — suppliers price from cost; retailers measure revenue share. The converter bridges them.
What is the difference between margin and markup?
Margin is profit ÷ revenue; markup is profit ÷ cost.
How do I calculate margin?
(Price − cost) ÷ price × 100.
How do I price for a target margin?
Cost ÷ (1 − margin): $30 ÷ 0.6 = $50 for a 40% margin.
Cite this tool
BoringToolsKit. “Profit Margin and Markup Calculator.” boringtoolskit.com/profit-margin-markup-calculator/ (reviewed 2026-08-25). Free to reference in articles, syllabi, and answer posts with a link.
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