Markup Calculator
Markup is what you add to cost; margin is what profit represents of the selling price. Mixing them up is one of the most expensive small mistakes in pricing: a 50% markup is only a 33% margin, so a shop pricing for '50%' with the wrong formula quietly underprices every job. This calculator prices from cost and markup, shows the profit, and translates the result into the margin figure your accountant and your bookkeeping software use.
- Selling price
- $15.00
- Profit per sale
- $5.00
- Equivalent profit margin
- 33.3%
50% markup on cost equals a 33.3% margin on price. The two are not the same number; margin is always smaller.
Know the price already? Get the markup and margin
What to Know
- Markup is profit as a percent of cost; margin is profit as a percent of price. A 100% markup is a 50% margin, a 50% markup is a 33.3% margin, and a 25% markup is only a 20% margin.
- Margin can never reach 100%, but markup has no ceiling: pricing a $2 part at $10 is a 400% markup and an 80% margin.
- Keystone pricing, the retail tradition of doubling wholesale cost, is exactly a 100% markup.
- The trades commonly quote materials at 10% to 20% markup and labor much higher, which is why a blended 'shop rate' is usually simpler to defend on an invoice.
- To hit a target margin, divide cost by (1 minus the margin): a $10 cost priced for a 40% margin is $10 / 0.60 = $16.67, not $14.00 (which is what mistakenly 'adding 40%' gives you).
Frequently Asked Questions
What is the difference between markup and margin?
Markup measures profit against what you paid (cost); margin measures profit against what you charge (price). The same sale always has a higher markup number than margin number: $10 cost sold at $15 is a 50% markup but a 33.3% margin.
What markup should a small business use?
There is no universal number: retail keystone is 100% markup, restaurants commonly run 200% to 300% on food cost, and trades often mark up materials 10% to 20% while pricing labor separately. Work backward from the margin your overhead requires rather than copying a rule of thumb.
How do I price for a target margin instead?
Divide cost by (1 minus the target margin as a decimal). For a 40% margin on an $8 cost: $8 / 0.6 = $13.33. Adding 40% to cost gives $11.20, which is only a 28.6% margin, and that gap is exactly why the distinction matters.
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Results are general-purpose calculations, not legal, tax, or accounting advice. How our math is built and checked →