How the markup and margin calculator works
Markup and margin both describe profit, but they use a different base:
- Markup is profit as a percentage of cost.
- Margin is profit as a percentage of selling price.
This calculator converts between the two and computes the selling price and profit from the cost.
Example
Cost is $50 and you apply a 40% markup. Price = 50 × 1.40 = $70, profit = $20, and the margin is 20 ÷ 70 × 100 = 28.57%.
Cost is $50 and you want a 30% margin. Price = 50 ÷ 0.70 = $71.43, profit = $21.43, and the markup is 21.43 ÷ 50 × 100 = 42.86%.
Notes and assumptions
- Margin must be below 100%, because a 100% margin would require an infinite selling price.
- Markup can exceed 100% — doubling the cost is a 100% markup.
- The calculator uses exact decimal arithmetic so the margin and markup always reconcile with the price and profit.
- A negative profit (price below cost) shows as a negative markup and margin, which can happen during loss-leader promotions or clearance sales.
- The cost field cannot be zero when finding the markup, because markup divides profit by cost.
Frequently asked questions
What is the difference between markup and margin?
Markup is based on cost; margin is based on the selling price. A 50% markup produces a 33.3% margin, not 50%. Always confirm which one a supplier or report is using.
How do I convert markup to margin?
Margin % = Markup % ÷ (1 + Markup ÷ 100). A 100% markup gives a 50% margin.
How do I convert margin to markup?
Markup % = Margin % ÷ (1 − Margin ÷ 100). A 50% margin gives a 100% markup.
Why can't margin be 100% or more?
Margin divides profit by price. At 100% margin, the cost would have to be zero for the profit to equal the price.