How to use the markup calculator
- Choose what you already know: cost and markup, cost and margin, cost and price, or price and markup or margin.
- Enter the values.
- Read the missing price or cost, the profit per unit, and the equivalent markup and margin.
- Use the conversion table to translate common markups into margins and back.
Worked example
Cost $60 with a 50% markup
The selling price is $90 and profit is $30 per unit. That is a 33.33% margin. To earn a 40% margin on the same cost you would need a price of $100, which is a 66.67% markup.
How it works
Markup = (price − cost) ÷ cost. Margin = (price − cost) ÷ price. Price from markup = cost × (1 + markup). Price from margin = cost ÷ (1 − margin). Cost from price = price ÷ (1 + markup) or price × (1 − margin). Conversions: margin = markup ÷ (1 + markup) and markup = margin ÷ (1 − margin).
Assumptions
- Cost is the full unit cost you want to cover (product, shipping in, packaging).
- Taxes such as VAT or sales tax are excluded from price and cost.
Frequently asked questions
Why can a margin never reach 100%?
A 100% margin would mean the item cost nothing. As margin approaches 100%, the required markup grows without limit.
Which should I use for pricing, markup or margin?
Either works if used consistently. Margin ties directly to your profit and loss statement; markup is easy to apply to costs. The calculator shows both.
Does a 50% markup mean 50% profit?
It means profit equals 50% of cost, which is a 33.3% margin on the selling price.
Limitations
- Per-unit arithmetic only; volume discounts and fixed costs are not included. Use the break-even calculator for fixed costs.