How to use the Markup Calculator
- Choose whether to find the selling price or the markup.
- Enter your cost per item.
- Enter the markup percentage, or the selling price if you are finding the markup.
- Read the price, profit, markup and margin.
Formula used
Price = cost × (1 + markup ÷ 100). Markup = (price − cost) ÷ cost × 100. Margin = (price − cost) ÷ price × 100.
Worked example
Here is the Markup Calculator worked through with the example values shown above, so you can check each step by hand.
| Inputs | |
|---|---|
| Find | Selling price (from cost and markup) |
| Cost | $60 |
| Markup | 50 % |
| Selling price | $90 |
| Result | |
| Selling price | $90.00 |
| Profit | $30.00 |
| Markup on cost | 50% |
| Profit margin on price | 33.33% |
Price and margin at different markups
For the default cost of 60.
| Markup | Selling price | Profit margin on price |
|---|---|---|
| 10 % | $66.00 | 9.09% |
| 25 % | $75.00 | 20% |
| 50 % | $90.00 | 33.33% |
| 75 % | $105.00 | 42.86% |
| 100 % | $120.00 | 50% |
The formulas
Selling price = cost × (1 + markup ÷ 100). With a cost of $60 and a 50% markup the price is $90 and the profit is $30. Markup = (price − cost) ÷ cost × 100, so selling a $60 item for $100 is a markup of 66.7%.
The margin is (price − cost) ÷ price × 100. In the first example the $30 profit on a $90 sale is a margin of 33.3%.
Markup versus margin
The two always differ, because they divide the same profit by different numbers. Markup divides by cost, margin by price, so margin is always smaller than markup (for any positive profit). A 50% markup is a 33.3% margin, a 100% markup is a 50% margin, and a 25% markup is a 20% margin.
Mixing them up leads to underpricing. If you want a 40% margin, a 40% markup is not enough. You need a 66.7% markup, or in other words price = cost ÷ 0.6.
Choosing a markup
Typical markups vary widely by business. Retailers often work from a keystone markup of 100% (doubling the cost) on some goods, while supermarkets run on far smaller markups with higher volume. Your own number should cover costs such as rent, wages and returns and leave a profit.
Remember to include all costs in the cost figure, such as shipping, fees and packaging, before adding the markup.
Using it for quotes
Service businesses can apply a markup to materials or subcontractors. Enter the cost you pay, choose a markup, and the price to quote is shown with your profit. For tax, add VAT or sales tax after the price using the VAT or sales tax calculators.
The profit margin calculator on this site goes the other way, starting from the price and cost.
Frequently asked questions
What is the markup formula?
Markup % = (selling price − cost) ÷ cost × 100.
How do I turn markup into margin?
Margin = markup ÷ (100 + markup) × 100. A 50% markup gives 50 ÷ 150 = 33.3%.
How do I turn margin into markup?
Markup = margin ÷ (100 − margin) × 100. A 40% margin gives 40 ÷ 60 = 66.7%.
Why is margin lower than markup?
Both use the same profit, but margin divides by the larger selling price.
Does the cost include tax?
Use your cost before any recoverable tax such as VAT, and add the tax to the final price separately.
Can the markup be negative?
If you sell below cost the markup is negative. This tool takes zero or higher for the markup input, but the markup-from-price mode needs a price of zero or more.
This calculator gives estimates for information only. Actual figures from a bank, employer, tax authority or doctor may differ. It is not financial, tax, legal or medical advice.