Markup and Margin Calculator
Compare markup on cost with gross margin on selling price and calculate gross profit from entered cost and selling price.
Calculate price markup
How this tool works
Markup and margin use the same gross-profit amount but different denominators. This calculator shows both values together, helping prevent a common pricing mistake in which a desired margin is treated as an equivalent markup percentage.
Gross profit equals selling price minus cost. Markup percentage is profit divided by cost times 100; gross margin percentage is profit divided by selling price times 100.
How to use it
- Enter the per-unit cost.
- Enter a selling price that is at least as large as cost.
- Compare gross profit, markup on cost, and margin on selling price.
Worked examples
Fifty-percent markup
- Input
- Cost 40, selling price 60
- Output
- 50% markup and 33.33% margin
Profit is 20. Dividing profit by the 40 cost gives 50% markup, while dividing the same profit by the 60 selling price gives 33.33% margin.
Retail example
- Input
- Cost 75, selling price 100
- Output
- 33.33% markup and 25% margin
The 25 gross profit is one third of cost but one quarter of revenue, illustrating why markup and margin percentages are not interchangeable.
Limitations
- The calculation excludes overhead allocation, discounts, taxes, returns, and fees.
- Gross margin is not the same as net profit margin.