Markup & Margin Calculator
Turn a cost and sale price into profit, markup and gross margin.
Gross figures only — they exclude overheads such as rent, wages and shipping. This is general information, not financial advice.
Two views of the same profit
Markup and margin both describe profit, but measure it against different things. Markup compares profit to what the item cost you; margin compares it to what the customer paid.
markup = profit ÷ cost · margin = profit ÷ price
Because the sale price is bigger than the cost, the margin percentage is always lower than the markup for the same profit. Mixing them up is a classic pricing error — a "50% markup" is only a 33% margin.
A product that costs $40 and sells for $100 makes $60 profit. That is a 150% markup on cost, but a 60% gross margin on the sale price — the same profit, two different denominators.
Pricing with intent
Setting prices from cost alone is easy with markup; understanding profitability is easier with margin. Knowing both — and that gross profit still has overheads to cover — keeps pricing decisions grounded.
Worth remembering
- Margin < markup. Always, for the same profit, because of the larger denominator.
- Gross isn’t net. Rent, wages and shipping come out of gross profit.
- Convert with care. A target margin implies a specific, higher markup.