Markup & margin calculator

Markup and margin are two different measures of the same profit, and mixing them up is a common pricing mistake. This tool computes the profit from cost and selling price, then shows both the markup (a percentage of cost) and the margin (a percentage of selling price) side by side so you understand how they differ.

Formula

Profit = selling price − cost. Markup = profit ÷ cost × 100. Margin = profit ÷ selling price × 100.

When is this useful?

Use it when pricing a product or service to see how much you actually earn, and to compare supplier offers or competitor prices on a consistent basis.

Worked example

Example using the calculator’s values: cost 80, selling price 120.
Profit 40, markup 50%, and margin 33.3%.

Assumptions

Cost and selling price are per single unit.
Markup is based on cost; margin is based on selling price.
If profit is negative both percentages show as negative (a loss).
The currency is display-only; there is no conversion.

Common mistakes

Using margin where markup is intended and vice versa, because the base differs.
Dividing by the wrong base: markup from cost, margin from selling price.
Assuming a 50% markup means a 50% margin — its margin is only 33.3%.

Frequently asked questions

Which number should I use for pricing: markup or margin?

Both express the same profit on different bases. Use markup when you start from cost and add a percentage, and margin when you know the profit you want from the selling price.

Can both percentages be negative?

Yes. When the selling price is below cost, profit is negative and both percentages show as negative (a loss).

Methodology and review

The calculator computes profit first, then divides it by cost for markup and by selling price for margin, with no internal rounding.

Indirect costs (such as shipping and rent) are not part of this calculation unless included in the cost entered.