Business
Markup calculator
Markup is profit as a percent of cost. Enter your cost and markup to get the selling price, and see why the margin is always a smaller number.
What this means
- A 50% markup on $40.00 gives a price of $60.00.
- That is a 33.33% margin, because margin divides the same profit by the price, not the cost.
What if
About this calculator
What this calculator does
It adds a percent of the cost to the cost to set the price, then shows the resulting margin.
How it is calculated
price = cost * (1 + markup / 100)
profit = price - cost
margin = profit / price * 100
How to read the result
Markup is based on cost. Margin is based on price. A 50% markup is a 33.33% margin.
Sources and method
Standard arithmetic with no outside data. The formula is shown under How it is calculated, and unit tests check worked examples, including edge cases.
This page uses arithmetic only, with no outside data.
Questions
What is the difference between markup and margin?
Markup divides profit by cost. Margin divides profit by price. Margin is always lower for a positive profit.
What is keystone pricing?
A 100% markup, which doubles the cost and gives a 50% margin.
How do I find markup from a price?
Use the profit margin calculator, which works from cost and revenue.
Should overhead be in the cost?
For per-unit pricing, include costs that scale with each unit. Cover overhead with the break-even calculator.