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Margin & Markup Calculator

Cost in, price out — margin, markup, and profit, or the price you need to hit a target.

Buğra SözeriFinance
Updated · Published
Reviewed by Convertitive Finance Desk
Financial disclaimer: This calculator is for educational purposes only and is not financial advice. Verify all figures with a qualified accountant or financial professional before pricing decisions.

Margin and markup are the two ways businesses express profit on a sale, and confusing them is one of the most expensive pricing mistakes a small business can make. Margin is profit measured against the selling price; markup is the same profit measured against your cost. Because the denominators differ, the two numbers never match — a 25% markup is only a 20% margin. The calculator below works both directions: enter cost and price to read off margin, markup, and profit, or enter a cost and a target to find the price you must charge. For the broader picture of how percentages move between bases, see our percentage calculator.

Enter what an item costs you and what you sell it for, get margin, markup, and profit.

Margin
20%
Markup
25%
Profit
$20.00

Margin is profit as a share of the selling price; markup is profit as a share of cost. They are not the same — a 25% markup equals a 20% margin.

How to use

  1. Enter your unit cost

    What the item costs you to make or buy — the all-in landed cost per unit, before any margin.

  2. Enter the selling price (or a target)

    In the first tab, enter the price you sell at. In the second tab, enter a target margin or markup percentage instead.

  3. Read the result

    The first tab returns margin %, markup %, and per-unit profit. The second returns the selling price required to hit your target.

Same profit, two numbers

Each row is the same cost and price — notice margin and markup are always different.

CostPriceProfitMarkupMargin
$80$100$2025%20%
$50$100$50100%50%
$75$100$2533.3%25%
$40$100$60150%60%

Frequently asked questions

What's the difference between margin and markup?
They measure the same profit against different bases. Markup is profit ÷ cost; margin is profit ÷ selling price. Buy for $80 and sell for $100, and your $20 profit is a 25% markup (20 ÷ 80) but a 20% margin (20 ÷ 100). They are confused because both are quoted as a percentage and both describe the same sale — but markup always reads higher than margin, because cost is smaller than price.
Why does a 25% markup equal a 20% margin?
Markup divides the $20 profit by the $80 cost (25%); margin divides the same $20 by the $100 price (20%). The numerator is identical — only the denominator changes. As profit grows the gap widens: a 100% markup is a 50% margin, a 150% markup is a 60% margin.
Which one should I use for pricing?
Use markup when you set prices by adding to cost (common in retail and manufacturing). Use margin when you plan against revenue and report profitability (common in accounting and finance). Mixing them up — applying a target margin as a markup — systematically underprices your goods.
Can a margin be 100% or more?
No. Margin is capped below 100% because profit can never exceed the selling price (that would require a zero or negative cost). Markup has no upper bound — a $1 item sold for $10 is a 900% markup but only a 90% margin. The calculator returns no price when you ask for a 100%+ target margin.
How do I find the price for a target margin?
Divide cost by (1 − margin/100). For a 40% margin on an $80 item: $80 ÷ (1 − 0.40) = $133.33. For a target markup instead, multiply: cost × (1 + markup/100). The second tab of the calculator does this for you.
Does this account for taxes, fees, or overhead?
No. The result is gross margin on a single unit using the cost you enter. Marketplace fees, shipping, returns, and fixed overhead all reduce your true net margin. Treat the figure as the starting point, then subtract those costs to find what you actually keep.

About

Gross margin vs net margin

This tool computes gross margin — revenue minus the direct cost of the unit. Net margin subtracts everything else: overhead, marketing, fees, taxes. A healthy gross margin can still produce a thin or negative net margin once those are counted, which is why gross margin is a pricing input, not a profitability verdict.

Keystone pricing and common conventions

Retail's classic 'keystone' rule is a 100% markup — doubling cost — which yields a 50% margin. Many categories now price well above keystone to cover returns and platform fees. There is no universal correct number; it depends on your costs, competition, and how much of the price is eaten before it reaches you.

Sources & references

Authoritative references behind the math, constants, and tables on this page. Verified by Buğra Sözeri on the dates shown and re-checked at every deploy.