Markup vs margin calculator
Markup is profit over cost; margin is profit over price. A 50% markup is a 33.3% margin, and confusing them destroys more small businesses than bad products do.
%
%
Selling price
60.00
- Profit per unit
- 20.00
- Margin at that markup
- 33.333 %
- Price needed for the target margin
- 66.67
- Markup that target margin implies
- 66.667 %
- Profit at the target margin
- 26.67
- Cost multiplier
- 1.5000
Show the working
- Cost = 40
- Markup = 50
- Or a target margin = 40
- Selling price = 40 * (1 + 50/100) = 60
- Profit per unit = 60 - 40 = 20
- Margin at that markup = 60 > 0 ? 20 / 60 * 100 : 0 = 33.3333
- Price needed for the target margin = 40 < 100 ? 40 / (1 - 40/100) : 0 = 66.6667
- Markup that target margin implies = 40 > 0 ? (66.6667 - 40) / 40 * 100 : 0 = 66.6667
- Profit at the target margin = 66.6667 - 40 = 26.6667
- Cost multiplier = 1 + 50/100 = 1.5
Values are shown to six significant figures here; the arithmetic itself runs on exact fractions and is only rounded where a number is printed.
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The formula
- price = cost x (1 + markup)
- margin = profit / price; markup = profit / cost
- margin = markup / (1 + markup)
Margin can never reach 100%. Markup has no ceiling. That asymmetry is the whole distinction.