Margin and Markup Calculator
Cost is what you pay for the item; price is what the customer pays.
Margin and markup both describe the same profit, measured against different numbers. Margin compares profit with the selling price; markup compares it with the cost. Use this calculator to find both from a cost and price, or to set a selling price that hits the margin or markup you want.
Margin divides by price, markup divides by cost, so markup is always the bigger number
Same Profit, Different Divisor
An item costs $25 and sells for $40, a profit of $15. Here's that $15 as a margin and as a markup.
Accountants and investors talk in margin, because it shows how much of every sales dollar you keep. Shops often price with a markup, because it starts from the cost they already know. Just make sure everyone means the same one.
Markup to Margin
Margin = markup ÷ (1 + markup). Markup = margin ÷ (1 − margin).
| Markup | Margin | $10 cost sells for |
|---|---|---|
| 10% | 9.1% | $11.00 |
| 20% | 16.7% | $12.00 |
| 25% | 20% | $12.50 |
| 33.3% | 25% | $13.33 |
| 50% | 33.3% | $15.00 |
| 60% | 37.5% | $16.00 |
| 75% | 42.9% | $17.50 |
| 100% (keystone) | 50% | $20.00 |
| 150% | 60% | $25.00 |
| 200% | 66.7% | $30.00 |
Pricing for a Target Margin
You want a 40% margin on a $25 item. The tempting shortcut gets it wrong.
Margin on a 4 Function Calculator
Each one is a single division or multiplication on a basic calculator.
Margin of $25 → $40
Price for 40% Margin
Price for 50% Markup
Gross vs net margin, discounts and pricing mistakes are explained in Margin vs Markup: What's the Difference and How to Price.
Explore Other Calculators
Frequently Asked Questions
What is the difference between margin and markup?
Margin divides profit by the price; markup divides it by the cost. A $25 item sold for $40 makes $15: a 37.5% margin (15 ÷ 40) and a 60% markup (15 ÷ 25).
How do you calculate profit margin?
Margin = (price − cost) ÷ price × 100. For a $40 price and $25 cost: (40 − 25) ÷ 40 × 100 = 37.5%.
How do you price for a target margin?
Divide the cost by (1 − margin). For 40% on a $25 cost: 25 ÷ 0.6 = $41.67. Multiplying by 1.4 gives $35, which is only a 28.6% margin.
How do you convert markup to margin?
Margin = markup ÷ (1 + markup). A 50% markup is 0.5 ÷ 1.5 = 33.3% margin. The other way, markup = margin ÷ (1 − margin): a 40% margin is a 66.7% markup.
Can margin be more than 100%?
No. Profit can't be more than the whole price, so margin stays below 100%. Markup has no ceiling: a $5 item sold for $20 is a 300% markup but a 75% margin.
What is a good profit margin?
It depends on the industry. Grocery stores often run gross margins around 25 to 30%, restaurants 60 to 70% on food, and software far higher. Gross margin is before overheads like rent and wages, so net margin is always lower.