Margin is profit as a percentage of the selling price, while markup is profit as a percentage of cost. Enter cost and price into the Margin/Markup Calculator and it shows both, since they are calculated from the same numbers but give different percentages.
Follow along with the free Margin/Markup Calculator, which runs in your browser, or browse more tools in this category.
How to use the Margin/Markup Calculator
- Enter your cost and your selling price, or one of them plus a target.
- Read the profit, margin percentage and markup percentage.
- Adjust the price until you reach your target margin.
- Use the result to set prices.
Worked example
An item costing $60 sold for $100 has a profit of $40. The margin is 40% of $100, and the markup is about 66.7% of $60.
Tips and common mistakes
- A 50% markup is a 33.3% margin, so the two are easy to confuse.
- Margin can never reach 100%, but markup can exceed it.
- Remember to include all costs, not just the purchase price.
Frequently asked questions
What is the difference between margin and markup?
Margin divides profit by revenue. Markup divides profit by cost.
Which should I use for pricing?
Many businesses track margin because it shows how much of each sale is profit.
Is it private?
Yes.