Margin and Markup Calculator
Convert between markup and margin, and see why the same profit gives two different percentages.
Two words that are not the same
Markup and margin both describe profit as a percentage, and confusing them is one of the most common and costly mistakes in pricing — because for the same sale they give different numbers. This calculates both from your cost and price, so you always know which one you are quoting.
The two formulas
The difference is what you divide the profit by:
Markup = (price - cost) / cost x 100Margin = (price - cost) / price x 100Markup measures profit against what the item cost you; margin measures it against the price you sold it for. Since the price is always higher than the cost, the margin percentage is always lower than the markup percentage for the same sale.
The same sale, two numbers
Take an item costing 60 sold for 100 — a profit of 40:
This is exactly where money leaks: a business that wants a 40% margin but mistakenly applies a 40% markup underprices every item and quietly loses profit on every sale. The relationship is fixed, so common values map cleanly:
| Markup | Equivalent margin |
|---|---|
| 25% | 20% |
| 50% | 33% |
| 66.7% | 40% |
| 100% | 50% |
| 150% | 60% |
The habit that prevents the mistake is always stating which you mean. When someone quotes a percentage on a price, ask whether it is markup or margin, because the answer changes the actual price.
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. For the same sale, margin is always the lower number.
Why does confusing them lose money?
If you want a 40% margin but apply a 40% markup, you underprice every item — the markup that gives a 40% margin is actually 66.7%.
How do I convert between them?
Enter your cost and price and this shows both. As a guide, a 50% markup equals a 33% margin, and a 100% markup equals a 50% margin.
Which should I use for pricing?
Either, as long as you are consistent and clear which one. Margin is common in retail and accounting; markup is common when pricing up from cost.
Is anything uploaded?
No. The calculation happens in your browser.