Margin vs Markup Calculator
Enter cost and selling price to see both profit margin and markup — and understand the difference.
Enter cost and selling price. Results update on click. Works for any currency.
Margin vs markup — the key difference
Both measure profitability, but they use a different denominator:
| Measure | Formula | Based on |
|---|---|---|
| Profit margin | (Selling price − Cost) ÷ Selling price × 100 | Selling price |
| Markup | (Selling price − Cost) ÷ Cost × 100 | Cost price |
Because the denominators differ, the same product will always have a lower margin than markup. A 25% markup is only a 20% margin.
Quick conversion table
| Markup | Margin |
|---|---|
| 11.1% | 10% |
| 25% | 20% |
| 33.3% | 25% |
| 50% | 33.3% |
| 100% | 50% |
| 200% | 66.7% |
Worked examples
Example 1: product costs £80, sells for £100
- Profit = £100 − £80 = £20
- Margin = £20 ÷ £100 × 100 = 20%
- Markup = £20 ÷ £80 × 100 = 25%
Example 2: cost $50, selling price $75
- Profit = $75 − $50 = $25
- Margin = $25 ÷ $75 × 100 = 33.3%
- Markup = $25 ÷ $50 × 100 = 50%
Why the confusion matters
Mixing up margin and markup causes real pricing errors:
- Asking for "a 30% margin" but calculating a 30% markup will leave you with only a 23% margin — you’ll earn less than you expected.
- Financial reports, retail buyers, and accountants usually mean margin when they say “profit percentage.”
- Manufacturers and wholesalers often mean markup — what percentage above cost they charge.
Converting between the two
Markup from margin: Markup = Margin ÷ (100 − Margin) × 100
Also on this site
- Discount Calculator — find the sale price after any percentage off
- Percentage Change Calculator — measure increase or decrease between two values
- Percentage Calculator — all three core percentage tools in one place
FAQ
What is a good profit margin?
It varies by industry. Grocery retail typically operates on 1–3% net margin. Software companies often achieve 20–30%+. A margin above 20% is generally considered healthy for product-based businesses.
Can margin ever be higher than markup?
No. Margin is always lower than the equivalent markup because it is divided by the larger selling price. The only exception is when the selling price is below cost (a loss), in which case both are negative.
What markup do I need for a 30% margin?
Use the formula: Markup = 30 ÷ (100 − 30) × 100 = 30 ÷ 70 × 100 = 42.86%. Verify with the calculator above.
What is gross margin vs net margin?
Gross margin subtracts only the cost of goods sold (COGS) from revenue. Net margin also subtracts operating costs, taxes, and interest. This calculator shows gross margin.