Markup and Margin Calculator
Markup and margin both describe the profit on a sale, but they measure it against different numbers — and confusing them quietly erodes pricing decisions. Markup is profit as a percentage of what the item cost you; margin is profit as a percentage of what you sold it for. This calculator takes a cost and a selling price and returns both percentages plus the cash profit, so you can price a product, read a supplier quote, or check that a discount still leaves a healthy margin.
Calculate
Default result: 25.00
Markup and Margin Calculator · Materials
calculators.dev
Markup (% of cost)
80 × 100
Shopping list
- Margin (% of price)
- 20.00
- Profit
- $20.00
Est. total
25.00
Estimate — confirm w/ supplier · calculators.dev
Reviewed by the calculators.dev team · Last updated 2026-06-23
How to calculate
Enter what the item cost you and what you sell it for. The calculator subtracts the cost from the price to find the profit, then expresses that profit two ways: divided by the cost for the markup, and divided by the price for the margin. A cost of 80 and a price of 100 give a profit of 20, a 25% markup, and a 20% margin. Both figures, and the profit in currency, update as you change either number.
profit = price − cost. markup% = (profit ÷ cost) × 100, measuring profit against what you paid. margin% = (profit ÷ price) × 100, measuring profit against what you charged. Because the cost is smaller than the price for a profitable sale, the markup is always the larger percentage of the two.
Example calculation
An item that costs 80 and sells for 100 makes a profit of 20. Measured against the cost, that profit is 20 ÷ 80 = 25%, the markup. Measured against the selling price, the same 20 is 20 ÷ 100 = 20%, the margin. The two describe one profit from different bases, which is why the markup (against the smaller cost) is always the larger figure.
- markupPercent
- 25%
- marginPercent
- 20%
- profit
- $20.00
Assumptions
- Both cost and price must be above zero, since markup divides by the cost and margin divides by the price.
- Selling below cost produces a negative markup and margin, which the calculator reports rather than hiding.
- The figures cover a single unit's gross profit and ignore overheads, taxes, and fees, which a net-margin analysis would include.
Common mistakes
- Using markup and margin interchangeably — a 25% markup is only a 20% margin, so quoting the wrong one overstates profitability.
- Setting a target margin by adding that percentage to cost, which actually produces a smaller margin than intended.
- Forgetting that overheads, shipping, and fees sit on top of cost, so gross margin overstates the profit you keep.
Frequently asked questions
What is the difference between markup and margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of selling price. For a cost of 80 and a price of 100, the markup is 25% and the margin is 20%.
Why is the markup higher than the margin?
Both measure the same profit, but markup divides by the smaller cost while margin divides by the larger price, so markup is always the bigger percentage.
How do I set a price for a target margin?
Divide the cost by (1 − target margin as a decimal). For a 20% margin on an 80 cost, price = 80 ÷ 0.8 = 100.
Does this include overheads and taxes?
No. It shows gross profit on a single unit. Subtract overheads, fees, and taxes separately to find the net profit you actually keep.