What is the difference between markup and margin?

Markup is the profit expressed as a percentage of the cost price. Margin (gross margin) is the profit expressed as a percentage of the selling price. A 50% markup on a $40 cost gives a $60 selling price. The margin on that sale is $20 ÷ $60 = 33.3%. Same profit, different percentages.

How do I find the selling price from cost and markup?

Selling price = Cost × (1 + Markup% ÷ 100). With a $40 cost and 50% markup: $40 × 1.50 = $60 selling price.

How do I convert markup to margin?

Margin = Markup ÷ (1 + Markup). For a 50% markup: 0.50 ÷ 1.50 = 0.333 = 33.3% margin. They are never equal except at 0%.

What is a good markup percentage?

It depends heavily on the industry. Retail clothing often uses 100–300% markup. Grocery stores use 10–30%. Restaurants mark up food 200–500%. Software and digital goods often have very high markups due to near-zero marginal cost.

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Markup Calculator

Calculate selling price from cost and markup percentage. See the profit amount and gross margin simultaneously. Includes a reverse calculator to find markup from cost and selling price.

Cost + markup → selling price

Enter the cost price and markup percentage to find the selling price, profit, and gross margin.

Cost price

Markup %

Enter values above to calculate

Reverse: find markup from cost and selling price

Enter the cost and selling price to calculate the markup and margin percentages.

Cost price

Selling price

Enter cost and selling price above

Markup vs margin: what's the difference?

This is one of the most commonly confused concepts in business pricing. Both use the same profit figure — they just express it as a percentage of different things.

Markup

Profit ÷ Cost × 100

On a $40 cost, $60 sell: $20 ÷ $40 = 50% markup

Margin (gross margin)

Profit ÷ Selling price × 100

On a $40 cost, $60 sell: $20 ÷ $60 = 33.3% margin

The markup percentage will always be higher than the margin percentage for the same transaction. A 50% markup equals a 33.3% margin. A 100% markup equals a 50% margin. They converge only at 0% (no profit).

Typical markup rates by industry

Retail clothing: 100–300%. Grocery: 10–50%. Restaurants (food): 200–500%. Electronics: 20–40%. Pharmaceuticals: 200–5,000%. Software/digital goods: effectively unlimited due to near-zero marginal cost.

Converting markup to margin

Formula: Margin = Markup ÷ (1 + Markup). For a 50% markup: 0.50 ÷ 1.50 = 0.333 = 33.3% margin. For a 100% markup: 1.00 ÷ 2.00 = 50% margin.

Frequently asked questions

How do I calculate markup percentage?▾

Markup % = ((Selling price − Cost) ÷ Cost) × 100. If cost is $40 and selling price is $60: ((60 − 40) ÷ 40) × 100 = 50% markup.

What is a 50% markup on $80?▾

$80 × 1.50 = $120 selling price. Profit = $40. Gross margin = $40 ÷ $120 = 33.3%.

Why is markup always higher than margin?▾

Because markup divides profit by the smaller number (cost), while margin divides the same profit by the larger number (selling price). The same profit amount produces a larger percentage when divided by a smaller denominator.

How do I find the selling price if I know the desired margin?▾

Selling price = Cost ÷ (1 − Margin%). For a 40% margin on a $60 cost: $60 ÷ (1 − 0.40) = $60 ÷ 0.60 = $100 selling price.

Is this markup calculator free?▾

Yes — completely free, no signup, no ads. All calculations run instantly in your browser.