Markup vs Margin Calculator
Convert between markup and gross margin, find the selling price for a target margin or markup, and see the profit on each sale.
Markup and margin both describe the same profit, but measured against different numbers: markup compares profit with what the item cost you, margin compares it with the selling price. Mixing them up is one of the most common pricing mistakes — a 40% markup is only a 28.6% margin. This calculator finds the price, profit, markup and margin from whichever two figures you know.
How to use this tool
- Choose what you know: cost and price, cost and markup, or cost and a target margin.
- Enter the unit cost.
- Enter the selling price, markup or margin, depending on your choice.
- Read the price, profit, markup and margin, and use the table to convert other margins.
Formula
Markup = (Price − Cost) ÷ Cost × 100
Margin = (Price − Cost) ÷ Price × 100
Price from margin = Cost ÷ (1 − Margin ÷ 100)
The two are linked: Margin = Markup ÷ (1 + Markup) and Markup = Margin ÷ (1 − Margin), with both written as decimals. Margin can never reach 100%, but markup has no upper limit.
Example
An item costs $60 and sells for $100. The profit is $40, so the markup is 40 ÷ 60 = 66.67% and the gross margin is 40 ÷ 100 = 40%. To hit a 50% margin on the same item you would need a price of 60 ÷ 0.5 = $120, which is a 100% markup.
Frequently asked questions
Is a 50% markup the same as a 50% margin?
No. A 50% markup on a $10 cost gives a $15 price and a 33.3% margin. A 50% margin needs a $20 price, which is a 100% markup.
Which one should I use for pricing?
Retailers often think in markup because it starts from cost. Financial statements and most business targets use margin, because it shows what share of each sales dollar is profit. Use whichever matches the target you are given, and convert with the table.
Does gross margin include overheads?
No. Gross margin only subtracts the direct cost of the item. Rent, wages and marketing come out later, in operating and net margin.
Last updated: 2026-10-30