Margin & markup
calculator
Margin and markup are different numbers computed from the same sale — and mixing them up quietly under-prices products. Enter cost and price, or price from a target margin, and see both, correctly.
Two percentages, one sale
Both describe the gap between cost and price — but against different bases. Markup divides profit by the cost (how much you added). Margin divides profit by the price (how much of each sales dollar you keep). The same $40 profit on a $60 cost is a 66.7% markup but only a 40% margin.
The classic pricing mistake
Wanting a 40% margin but applying a 40% markup: $60 × 1.40 = $84, which is only a 28.6% margin — profit quietly given away on every unit. To hit a target margin, divide the cost by one minus the margin: $60 ÷ 0.60 = $100.
50% margin = 100% markup (doubling the cost)
Margin can never reach 100% (that would mean zero cost); markup has no ceiling. Accountants and investors speak in margin; the percentage calculator handles the raw arithmetic behind both.
Margin & markup FAQ
Both measure profit, but markup divides it by cost while margin divides it by selling price. A $60 cost sold at $100 carries a 66.7% markup and a 40% margin — same sale, two numbers.
Divide the cost by one minus the margin as a decimal. For a 40% margin on a $60 cost: 60 ÷ 0.60 = $100. Applying a 40% markup instead ($84) misses the target.
No — a 100% margin would require zero cost. Markup, measured against cost, can be any size: a 300% markup means selling at four times cost, which is a 75% margin.
Because a 40% markup sounds like a 40% margin but delivers less: markup percentages are computed on the smaller base (cost), so the resulting margin is always lower than the markup number.