Markup & Margin Calculator
Calculate a selling price from your cost and desired markup or margin, and see the other percentage automatically.
Markup and margin are not the same thing
This is one of the most common pricing mistakes: markup is profit as a percentage of cost, while margin is profit as a percentage of selling price. A 50% markup does not equal a 50% margin — a $40 item marked up 50% sells for $60, giving a profit of $20, which is actually a 33.3% margin, not 50%.
Confusing the two can lead to under-pricing products, since a target margin always corresponds to a higher markup percentage than the margin number itself.
Which one should you use for pricing?
Margin is generally more useful for evaluating overall business profitability, since it's expressed relative to revenue (matching how revenue and profit are typically reported on financial statements). Markup is often more intuitive for setting individual product prices, since it's a straightforward percentage added on top of cost.
Many retail and product businesses ultimately care most about margin targets, then calculate the required markup percentage to hit that margin — which is exactly what selecting 'margin' as your input does in this calculator.
Frequently asked questions
Is a 50% markup the same as a 50% margin?
No — this is a very common mix-up. A 50% markup on a $40 cost gives a $60 price, which is only a 33.3% margin, since margin is calculated relative to the selling price, not the cost.
Which should I use to set my prices, markup or margin?
Margin is generally more useful for business-level profitability targets since it aligns with how revenue and profit are reported, while markup is often more intuitive for calculating an individual item's price from its cost.