Markup vs Margin Calculator (Profit, Markup %, Margin %)

Markup and margin both describe profit, but they use different denominators. That is why a 50% markup is not the same as a 50% margin.

• Profit = Price - Cost
• Markup % = Profit / Cost
• Margin % = Profit / Price

If your cost is 10 and your price is 15, profit is 5. The markup is 5/10 = 50%, while the margin is 5/15 = 33.33%. The numerator is the same, but the denominator changes.

This calculator helps you compute all three values together so you can compare pricing strategies and avoid confusion.

These formulas are the backbone of the calculator:

• Profit = Price - Cost
• Markup % = (Profit / Cost) * 100
• Margin % = (Profit / Price) * 100

Example:

• Cost: 20
• Price: 30
• Profit: 10
• Markup: 50%
• Margin: 33.33%

If you only know cost and markup, you can compute price:

• Price = Cost * (1 + Markup/100)

Example:

• Cost: 50
• Markup: 20%
• Price: 50 * 1.2 = 60

If you know cost and margin, you can compute price:

• Price = Cost / (1 - Margin/100)

Example:

• Cost: 100
• Margin: 30%
• Price: 100 / 0.7 = 142.86

Because markup uses cost and margin uses price, the same profit will produce two different percentages. Here is a small table to illustrate the difference:

The margin is always smaller than the markup for the same cost and profit. If your goal is to hit a specific margin, you must solve for price using the margin formula.

Markup is often used to create a consistent pricing rule across products or services. It can be easier to apply markup when you start from cost. Some businesses use a fixed markup, while others use tiers based on cost or market conditions. The right markup depends on overhead, labor, and competition, so use this tool to test scenarios rather than to pick a universal percentage.

If you need to compare discounts or promotions, use the markup tab to see how a discount changes profit, then cross-check with the margin result so you understand the true impact.

Margin is a direct measure of how much of each sale is profit before other expenses. Higher margins usually mean more room to cover overhead, marketing, and unexpected costs. A margin number can also help you compare different products with different costs, because it normalizes profit by price.

Remember that margin is not the same as net profit. It does not account for taxes, rent, or administrative costs. It is still a valuable signal for pricing decisions.

Here are six examples that mirror common situations:

1. Cost and price example: Cost 10, Price 15 -> Profit 5, Markup 50%, Margin 33.33%.
2. Cost + markup example: Cost 50, Markup 20% -> Price 60, Margin 16.67%.
3. Cost + margin example: Cost 100, Margin 30% -> Price 142.86, Markup 42.86%.
4. Discount scenario: Cost 40, Price 80 (50% margin). Apply 20% discount: new price 64, margin falls to 37.5%.
5. Negative profit: Cost 30, Price 25 -> Profit -5, Markup -16.67%, Margin -20% (a loss).
6. Rounding scenario: Cost 12.99, Price 19.99 -> Profit 7.00, Markup 53.89%, Margin 35.02%.

This calculator converts between markup and margin and shows profit, markup percent, and margin percent from cost and price. It makes pricing tradeoffs explicit.

Markup is profit divided by cost. Margin is profit divided by price. The tool computes both so you can see why the percentages differ for the same dollars.

Use this tool when pricing products or evaluating profitability. It is useful for retail, ecommerce, and service pricing where margin targets matter.