What is the difference between markup and margin?

Markup is the percentage difference between the cost and the selling price, calculated based on the cost. Margin (or Gross Margin) is the percentage difference calculated based on the selling price. Markup will always be a higher percentage numerically than margin for the same profitable transaction. For example, a 25% markup equals a 20% margin.

How do you calculate markup?

To calculate markup, subtract the cost price from the selling price to get the markup amount. Then divide the markup amount by the cost price and multiply by 100. The formula is: Markup % = ((Selling Price − Cost Price) / Cost Price) × 100. For example, if you buy an item for $50 and sell it for $75, your markup is ((75 − 50) / 50) × 100 = 50%.

How do you calculate markup percentage?

Markup percentage is calculated by dividing the profit (selling price minus cost) by the cost price, then multiplying by 100. Use the formula: Markup Percentage = ((Selling Price − Cost Price) / Cost Price) × 100. This tells you what percentage of the cost you are adding as profit. The markup percentage and markup are the same metric — both express profit as a percentage of cost.

How do you calculate selling price using markup percentage?

To calculate the selling price from cost and markup percentage, multiply your cost by (1 + markup percentage / 100). Formula: Selling Price = Cost Price × (1 + Markup % / 100). For example, if your cost is $100 and you want a 20% markup: Selling Price = 100 × (1 + 20/100) = 100 × 1.20 = $120.

How do I calculate a markup from cost and selling price?

Given a cost and selling price, subtract cost from selling price to find the profit amount, then divide that profit by the cost and multiply by 100. Formula: Markup % = ((Selling Price − Cost Price) / Cost Price) × 100. For example, if cost is $80 and selling price is $100: Markup % = ((100 − 80) / 80) × 100 = (20 / 80) × 100 = 25%.

Is 100% markup calculating simply doubling the cost?

Yes, exactly. A 100% markup means you add an amount equal to the cost to the price, effectively doubling it. Selling Price = Cost + (Cost × 100%) = Cost + Cost = 2 × Cost.

Can markup be negative?

Yes, a negative markup means you are selling below cost, resulting in a loss. This is sometimes done during clearance sales or as a loss-leader strategy to acquire customers. The calculator allows negative markup values down to −99.99% — but a markup of −100% would imply a zero selling price, which is not valid for pricing calculations.

Why is margin usually preferred over markup in financial reporting?

Margin directly relates profit to revenue (sales), which is the top line of an income statement. It is easier to compare profitability across different companies or industries using margin percentages. Additionally, margin can never exceed 100% for profitable sales, while markup can — making margin a more intuitive benchmark.

Markup Calculator

Currency

Cost Price

100

Markup Percentage

Selling Price

$120.00

$20.00 profit

$100

100 • Cost

$20

20.00 • Profit

Cost 83%

Profit 17%

Markup

20%

Markup percentage

Gross Margin

16.7%

Profit margin

Calculation Breakdown

How the selling price is derived from your inputs

Formula

Selling Price = Cost Price × (1 + Markup % / 100)

With Your Values

$100.00 × (1 + 20.00 / 100) = $100.00 × 1.2000 = $120.00

Margin vs Markup: Your markup is 20.00% (profit ÷ cost) and your gross margin is 16.67% (profit ÷ selling price). Markup is higher than margin whenever profit is positive — at 0% they are equal. A 20.00% markup equals a 16.67% margin.

How to Use the Markup Calculator

Three calculation modes to find selling price, markup percentage, or cost price

Choose your calculation mode

Select Find Selling Price to compute the price from cost and markup, Find Markup Percentage to find the markup from cost and selling price, or Find Cost Price to derive the cost from selling price and markup.

Enter your known values

In Find Selling Price mode, enter the cost price and markup percentage. In Find Markup Percentage mode, enter cost and selling price. In Find Cost Price mode, enter selling price and markup percentage. Use the sliders or type values directly — markup can go as low as −99.99% for loss scenarios.

Select your currency

Pick from USD, INR, EUR, GBP, and dozens of other currencies using the dropdown at the top of the calculator inputs. The results update automatically in your chosen currency.

Review your results

See the computed selling price, markup percentage, or cost price as the hero result. Below it, the cost-profit breakdown bar, markup and gross margin percentages, and profit amount give you the full picture at a glance.

Check the formula breakdown

The Calculation Breakdown card shows the exact formula used for your mode with your numbers substituted step by step. It also includes a margin-vs-markup note so you understand the relationship between both metrics.

Understanding Markup Calculation

Learn the fundamentals of markup and how it affects your pricing strategy

Markup is the difference between the cost of a good or service and its selling price, expressed as a percentage over the cost. It answers the question: how much more than my cost am I charging the customer?

A markup calculator helps you determine the right selling price for your products, analyse competitor pricing, and ensure you are covering overheads while staying competitive. It is widely used in retail, wholesale, manufacturing, and e-commerce for pricing strategy.

Key Insight

A 50% markup on a $100 product means you sell it for $150. The $50 profit is 50% of your cost — but only 33.3% of the selling price (that is the margin).

How to Calculate Markup, Markup Percentage & Selling Price

Step-by-step formulas and examples for all three markup scenarios

How to Calculate Markup

To calculate markup, you need the cost price and the selling price. Subtract the cost from the selling price to find the markup amount, then divide by the cost and multiply by 100.

Markup % = ((Selling Price − Cost Price) / Cost Price) × 100

Example: A product costs $50 and you sell it for $75 → Markup = ((75 − 50) / 50) × 100 = 50%

How to Calculate Markup Percentage

Markup percentage is the same metric as markup — it expresses profit as a percentage of the cost price. Use the same formula: divide the profit (selling price minus cost) by the cost price and multiply by 100.

Markup Percentage = ((Selling Price − Cost Price) / Cost Price) × 100

Example: A jacket costs $40 to produce and sells for $60 → Markup = ((60 − 40) / 40) × 100 = 50%

How to Calculate Selling Price Using Markup Percentage

If you know your cost price and the markup percentage you want to apply, multiply the cost by (1 + markup percentage / 100).

Selling Price = Cost Price × (1 + Markup % / 100)

Example: Cost is $80 and you want a 25% markup → SP = 80 × (1 + 25/100) = 80 × 1.25 = $100

Worked Examples

Three practical examples covering all markup calculation scenarios

Cost + Markup → Selling Price

You manufacture a widget that costs $45 per unit and want to apply a 30% markup.

Selling Price = 45 × (1 + 30/100) = 45 × 1.30 = $58.50

Profit per unit: $13.50 | Gross margin: 23.08%

Cost + Selling Price → Markup %

You bought a product for $120 and sold it for $180. What is your markup percentage?

Markup % = ((180 − 120) / 120) × 100 = (60 / 120) × 100 = 50%

Profit: $60 | Gross margin: 33.33%

Selling Price + Markup → Cost

A competitor sells a similar item for $250 and you know they use a 40% markup. What is their cost?

Cost Price = 250 / (1 + 40/100) = 250 / 1.40 = $178.57

Profit at this markup: $71.43 | Gross margin: 28.57%

Markup vs. Gross Margin

Understanding the key differences between markup and margin calculations

Markup and margin are often confused but measure profitability from opposite perspectives:

Markup

Based on Cost. How much you add to the cost to get the selling price. Formula: Profit ÷ Cost.

Gross Margin

Based on Revenue. What percentage of the selling price is profit. Formula: Profit ÷ Revenue.

Quick Example

If Cost is $100 and you sell for $125: Markup = 25% ($25 ÷ $100) | Margin = 20% ($25 ÷ $125)

Markup to Margin Quick Reference

Markup %	Margin %	Multiplier
5%	4.76%	1.05×
10%	9.09%	1.10×
15%	13.04%	1.15×
20%	16.67%	1.20×
25%	20.00%	1.25×
30%	23.08%	1.30×
40%	28.57%	1.40×
50%	33.33%	1.50×
75%	42.86%	1.75×
100%	50.00%	2.00×
150%	60.00%	2.50×
200%	66.67%	3.00×
300%	75.00%	4.00×
500%	83.33%	6.00×

Why Markup Calculation Matters for Your Business

How proper markup drives profitability, pricing strategy, and competitive advantage

Covers operating costs

Your markup must be high enough to cover rent, salaries, marketing, and other overhead — not just the cost of goods.

Hits profit targets

A precise markup helps you consistently reach your desired profit per unit, quarter after quarter.

Stays competitive

Reverse-engineer competitor pricing by solving for their markup from known cost and selling-price estimates.

Price new products

When launching a product, use markup to set an introductory price that recovers costs while testing the market.

Adapts to cost changes

When suppliers raise prices, instantly recalculate the selling price needed to maintain your target markup.

Prevents underpricing

Without knowing your markup, you risk selling below true cost — a common reason small businesses fail within two years.

Frequently Asked Questions

Common questions about markup, margin, and pricing strategies

The core markup formula is: Markup % = ((Selling Price − Cost Price) / Cost Price) × 100. Rearranged, you can also use: Selling Price = Cost Price × (1 + Markup % / 100) to find the selling price, or Cost Price = Selling Price / (1 + Markup % / 100) to find the cost. All three formulas are available in the How to Calculate Markup section and in the interactive Calculation Breakdown card within the results.

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Last updated Jun 16, 2026