Markup Calculator
Calculate markup, selling price, and profit per unit from your cost - and see exactly how markup differs from margin.
Markup
50.0%
Margin
33.3%
What Your Result Means
Markup is your profit expressed as a percentage of cost. Margin is that same profit expressed as a percentage of the selling price instead. They will always be different numbers unless your profit is $0 - this is one of the most common pricing mix-ups in business.
How It Is Calculated
Markup % = (Selling Price - Cost) / Cost × 100
Margin % = (Selling Price - Cost) / Selling Price × 100
Worked Example
A product costs $40 and sells for $60. Profit per unit is $20. Markup is $20 / $40 = 50%. Margin is $20 / $60 = 33.3%. Same profit, two different percentages depending on which base you use.
Important Assumptions
- "Cost" should reflect your true unit cost, including materials and direct labor if applicable.
- Does not include selling or overhead costs beyond what you enter as cost.
Frequently Asked Questions
- Why do markup and margin give different percentages for the same profit?
- Because they use different denominators - markup divides profit by cost, margin divides profit by selling price. Selling price is always higher than cost when there's a profit, so margin will always be a smaller percentage than markup.
- Which one should I use for pricing?
- Most retailers plan pricing using target margin (percentage of revenue), while markup is often used informally when marking up from wholesale cost. Use whichever matches how your business tracks profitability.
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Methodology
This calculator uses the standard markup and margin formulas used in retail and business pricing. See our methodology page for details.
Results depend entirely on the assumptions and figures you enter. Actual business performance may differ. This calculator does not provide accounting, tax, or legal advice.