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.
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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.