How to use it
- Type the Cost per unit.
- Type the Markup on cost in percent, for example 40.
- Read the Selling price and the Profit per unit, and the Gross margin of this price.
- Open the table to see the margin that each common markup gives, and the price for your cost.
How the selling price is calculated
A markup is added to the cost. The selling price is the cost multiplied by one plus the markup, and the profit is the difference. The same profit, seen against the price, is the gross margin, which is always smaller than the markup.
The table works the other way round too: each row gives a markup and the margin it produces, so you can choose a markup for a margin you want.
Selling price = cost × (1 + markup)
Profit = selling price − cost = cost × markup
Gross margin = markup ÷ (1 + markup)
markup and cost are fractions here: 40% is 0.40- A cost of 60 and a markup of 40% give a price of 60 × 1.40 = 84, a profit of 24 and a margin of 0.40 ÷ 1.40 = 28.57%.
- A markup of 0% gives a price equal to the cost and no profit.
Markup and margin describe the same profit
Markup is measured on the cost and margin on the selling price, so the two percentages for one price are never equal. A 100% markup is a 50% margin, and a 25% markup is a 20% margin.
When a price is quoted as a margin, the markup is margin ÷ (1 − margin). Use the Profit margin calculator when you start from a target margin.
What this calculator does not include
- Discounts, sales tax and VAT, shipping and payment fees.
- Overheads and wages, which the markup does not cover unless you add them to the cost first.
- Price changes over time, or prices that differ by customer or channel.
Worked example: cost 60 with a 40% markup
The selling price is 60 × (1 + 0.40) = 84. The profit is 84 − 60 = 24 per unit.
The margin of that price is 0.40 ÷ 1.40 = 28.57%. In the table, a 25% markup on the same cost gives a price of 75 and a margin of 20%.
| Figure | |
|---|---|
| Selling price | 84.00 |
| Profit per unit | 24.00 |
| Gross margin | 28.57% |
Frequently asked questions
What is the difference between markup and margin?
Markup is profit as a share of the cost, and margin is profit as a share of the selling price. For the same price the markup is always the larger percentage.
What markup gives a 30% margin?
A margin of 30% needs a markup of 0.30 ÷ 0.70 = 42.86%. The selling price is then the cost divided by 0.70.
Should I add my overheads to the cost before the markup?
Often yes. If the cost leaves out rent, wages or packaging, the markup has to cover them too, so the price can be too low even with a good-looking markup.
Why is my margin lower than my markup?
The margin divides the profit by the higher selling price, not by the cost. A 50% markup is a 33.33% margin, because the profit is taken from a larger base.
Are my figures sent to a server?
No. The calculation runs in your browser, and nothing you enter is sent to us.
Sources
- Wikipedia: Markup (business) (the cost times one plus markup formula and margin on price)
- Wikipedia: Profit margin (margin on selling price)
Figures and text last checked on Tuesday, November 10, 2026.