Calculator
Markup Calculator
Calculate markup amount and markup percentage from cost and selling price. Use it to analyze an existing price and see how markup differs from profit margin.
Result
- Markup
- 50%
- Markup amount
- $30.00
- Equivalent margin
- 33.33%
Profit as a percentage of cost.
Selling price minus cost.
Profit as a percentage of selling price.
How markup calculation works
Markup starts with cost. The calculator subtracts cost from selling price to find markup amount.
Markup percentage divides that markup amount by cost. That makes markup a cost-based pricing measure.
Margin uses revenue or selling price as the denominator instead. A 50% markup is not a 50% margin, because markup and margin divide by different numbers.
Markup formula
Markup Amount = Selling Price - Cost; Markup % = (Markup Amount / Cost) x 100Markup measures how much selling price is above cost. The related margin is shown only to help compare the two concepts.
- Cost is what the item, job, or unit costs before markup.
- Selling Price is the amount charged to the customer.
- Markup Amount is selling price minus cost.
- Markup % divides markup amount by cost.
What the Numbers Mean
- Cost
- The cost basis used for markup. Include materials, labor, or direct costs depending on what you are pricing.
- Selling price
- The price charged to the customer before discounts, tax, shipping, or separate fees.
- Markup percentage
- Profit divided by cost. This is useful when pricing starts from a known cost.
- Equivalent margin
- Profit divided by selling price. It is included to avoid confusing markup with margin.
Assumptions
- Cost must be greater than zero because markup percentage divides by cost.
- Selling price must be greater than zero so the margin comparison is defined.
- The calculator uses the cost and price you enter; it does not decide which costs belong in your cost basis.
- Discounts, taxes, shipping, platform fees, and overhead are excluded unless already reflected in cost or selling price.
- Negative markup is possible when selling price is below cost.
Worked Examples
$60 cost sold for $90
- Input
- $60 cost, $90 selling price
- Formula
- ($90 - $60) / $60 x 100
- Output
- $30 markup amount, 50% markup, 33.33% margin
The markup is 50% because profit is divided by cost. Margin is lower because profit is divided by selling price.
$25 cost sold for $40
- Input
- $25 cost, $40 selling price
- Formula
- ($40 - $25) / $25 x 100
- Output
- $15 markup amount, 60% markup, 37.5% margin
This is a common case where markup looks much higher than the equivalent margin.
$120 cost sold for $150
- Input
- $120 cost, $150 selling price
- Formula
- ($150 - $120) / $120 x 100
- Output
- $30 markup amount, 25% markup, 20% margin
A 25% markup produces a 20% margin because the denominator changes.
Selling below cost
- Input
- $80 cost, $72 selling price
- Formula
- ($72 - $80) / $80 x 100
- Output
- -$8 markup amount, -10% markup, -11.11% margin
A negative result means the selling price is below cost.
Markup vs Margin Reference Examples
Markup divides profit by cost. Margin divides profit by selling price, so the percentages differ on the same transaction.
| Example | Selling price | Markup | Equivalent margin |
|---|---|---|---|
| $40 cost | $60 | 50% | 33.33% |
| $60 cost | $90 | 50% | 33.33% |
| $80 cost | $100 | 25% | 20% |
| $100 cost | $125 | 25% | 20% |
| $100 cost | $150 | 50% | 33.33% |
A markup target cannot be treated as the same percentage margin because the denominator changes.
Selling Price Changes with Fixed Cost
Holding cost constant makes it easier to see how selling price changes markup and margin together.
$60 cost sold for $75
25% markup and 20% margin
A $15 profit is 25% of cost but only 20% of selling price.
$60 cost sold for $90
50% markup and 33.33% margin
The same cost with a higher selling price increases both measures.
$60 cost sold for $120
100% markup and 50% margin
Doubling cost creates a 100% markup, but margin is still 50%.
Related Guides for Markup Decisions
Use these when setting prices or comparing cost-based markup with revenue-based margin.
Frequently Asked Questions
How do I calculate markup percentage?
Subtract cost from selling price, divide the result by cost, then multiply by 100.
Is markup the same as margin?
No. Markup divides profit by cost. Margin divides profit by selling price or revenue.
Why is markup higher than margin?
Markup often appears higher because cost is usually lower than selling price, and markup uses cost as the denominator.
Can markup be negative?
Yes. If selling price is below cost, markup amount and markup percentage are negative.
What costs should I include?
Include the cost basis you want to analyze, such as direct product cost, job cost, landed cost, or another consistent internal cost.
When should I use cost plus pricing instead?
Use cost plus pricing when you know the cost and target markup and want to calculate the selling price.
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Disclaimer
This calculator is a simplified pricing tool and does not replace accounting, tax, or financial advice.