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
= Exact Markup and margin
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
  1. Cost = 40
  2. Markup = 50
  3. Or a target margin = 40
  4. Selling price = 40 * (1 + 50/100) = 60
  5. Profit per unit = 60 - 40 = 20
  6. Margin at that markup = 60 > 0 ? 20 / 60 * 100 : 0 = 33.3333
  7. Price needed for the target margin = 40 < 100 ? 40 / (1 - 40/100) : 0 = 66.6667
  8. Markup that target margin implies = 40 > 0 ? (66.6667 - 40) / 40 * 100 : 0 = 66.6667
  9. Profit at the target margin = 66.6667 - 40 = 26.6667
  10. 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.

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