What next?
Markup sets the price. Margin tells you what is left of it.
How to use this calculator
- Choose your currency and enter the cost price.
- Enter the markup percentage to add.
- Read the resulting selling price, profit and margin.
What your result means
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price — they are not the same, and confusing them eats profit. A 50% markup is only a 33% margin. Price with a target markup, then check the margin it actually gives you.
Why this one is different
Every number a quote needs falls out of one entry: what you paid, what you charge, what you keep, and the two rates that describe the same deal from either end. Nothing has to be re-derived by hand on the way to the invoice, which is where the arithmetic usually slips on a job with several lines.
Markup and margin are not the same thing
Markup is how much you add to your cost, expressed as a percentage of that cost. Margin is your profit expressed as a percentage of the selling price. A 50% markup does not give a 50% margin — it gives a 33% margin, because the price is larger than the cost.
Confusing the two is one of the most common pricing mistakes. This calculator shows both from a single cost and markup so you always know your true profit.
Formula
Profit is Price − Cost; markup is measured against cost, margin against price.
Example calculation
A product that costs £40 with a 60% markup:
Profit = 64 − 40 = £24.00
Margin = 24 ÷ 64 = 37.5%
Frequently asked questions
What is the difference between markup and margin?＋
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. The same profit always gives a lower margin percentage than markup percentage.
How do I convert markup to margin?＋
Margin = markup ÷ (1 + markup). A 60% markup is a 37.5% margin; a 100% markup is a 50% margin.
Why does a 50% margin need a 100% markup?＋
Because the two use different bases. To reach a fifty per cent margin the profit must equal half the selling price, which means the selling price is double the cost — a one hundred per cent markup. Doubling your cost gives a fifty per cent margin, not a hundred per cent one.
How much does a discount actually cost me?＋
More than the discount percentage suggests, because it comes entirely out of profit. On an item bought at ten and sold at fifteen, a ten per cent discount is one pound fifty — thirty per cent of your five pounds of profit, not ten. Thin-margin lines are especially vulnerable to blanket promotions.
Should I quote markup or margin to my team?＋
Whichever you choose, name the base every time. Buyers think in markup because they start from a supplier invoice; finance thinks in margin because it starts from revenue. Both are correct, and saying fifty per cent on cost or fifty per cent on price removes the ambiguity at no cost.
Related calculators
Further reading
Formula & reference
Assumptions & limitations
Every figure here comes from a simplified model. Keep these limits in mind when reading your result:
- The cost you enter is treated as the full landed cost. If it excludes carriage, duty, packaging or payment fees, the markup shown is higher than the one you are really earning.
- Markup and margin are different percentages of different numbers, and the result shows both deliberately — a 50% markup is a 33.3% margin, not a 50% one.
- Figures are per unit and exclude VAT or sales tax. Work in net prices throughout, then add tax at the end.
- Discounts, returns and shrinkage are not modelled. A line sold at 20% off carries a materially lower realised markup than the list price implies.
- Fixed overheads are not included, so a healthy markup on a single item does not by itself mean the business is profitable.