Markup vs Margin Calculator
Convert between markup and margin, and find the price that hits the margin you actually want.
Your details
Volume
This calculator runs entirely on your device. Nothing you enter is uploaded, stored, or sold. How this works
Selling price
$66.67
40.0% margin, 66.7% markup
Includes your inputs, the full breakdown, and every row of the table.
Selling price
$66.67
Profit per unit
$26.67
Margin
40.0%
Markup
66.7%
- Unit cost
- $40.00
- Selling price
- $66.67
- Gross profit per unit
- $26.67
- Monthly revenue (500 units)
- $33,333
- Monthly gross profit
- $13,333
- Annual gross profit
- $160,000
| Margin | Equivalent markup | Price | Profit |
|---|---|---|---|
| 10% | 11.1% | $44.44 | $4.44 |
| 20% | 25.0% | $50.00 | $10.00 |
| 25% | 33.3% | $53.33 | $13.33 |
| 30% | 42.9% | $57.14 | $17.14 |
| 40% | 66.7% | $66.67 | $26.67 |
| 50% | 100.0% | $80.00 | $40.00 |
| 60% | 150.0% | $100.00 | $60.00 |
| 70% | 233.3% | $133.33 | $93.33 |
What this means
- Margin divides profit by the selling price; markup divides it by the cost. The same trade is a 50% markup and a 33.3% margin, which is why the two get confused so expensively.
- A 50% margin requires doubling your cost, not adding half to it. Pricing at cost plus 50% leaves you with a 33% margin and a hole in the budget.
- This is gross margin only. Overhead, shipping, payment processing, returns and discounting all come out of it before anything reaches the bottom line.
How the markup vs margin calculation works
Markup and margin describe the same profit from different denominators, and confusing them is one of the most common and most expensive pricing errors in small business. Markup expresses profit as a percentage of what you paid; margin expresses it as a percentage of what you charged. Because the selling price is always larger than the cost, the margin figure is always the smaller of the two, and the gap widens dramatically as profitability rises.
The practical consequence is a systematic shortfall. A retailer who needs a 40% margin but prices at cost plus 40% ends up with a 28.6% margin — a quarter less gross profit than planned, on every unit, forever. At low margins the two numbers are close enough that the mistake hides; at high margins it becomes ruinous. The rule worth memorising is that to achieve a margin, you divide by one minus the margin rather than multiplying by one plus it.
Frequently asked questions
What is the actual difference between markup and margin?
The denominator. Buy for $40 and sell for $60 and you have made $20 either way — but that is a 50% markup on the $40 cost and a 33.3% margin on the $60 price. Both describe the same transaction correctly; they simply answer different questions.
How do I price for a specific margin?
Divide the cost by one minus the margin expressed as a decimal. For a 40% margin on a $40 item, divide by 0.6 to get $66.67. The intuitive approach of adding 40% gives $56 and a margin of only 28.6%, which is where the money quietly disappears.
Why can margin never reach 100%?
Because margin is profit as a share of the price, and the price always includes the cost. Approaching 100% would mean the cost approaches zero. Markup has no such ceiling — a $1 item sold for $50 carries a 4,900% markup and a 98% margin.
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Disclaimer. This calculator is provided for general information and educational purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Results are estimates based on the inputs you provide and the assumptions described above. Confirm any figure with a qualified professional before acting on it.