How It Works
Markup measures profit relative to cost. Margin measures profit relative to selling price. Both describe the same gross profit dollars from different bases.
Profit dollars equal selling price minus cost. Markup expresses that profit as a percentage of cost, while margin expresses the same profit as a percentage of selling price.
Because the denominators differ, a 50% markup is not a 50% margin. The calculator shows both measures so you can translate between the two without confusing their bases.
Formula
- C — Cost
- P — Selling price
- G — Gross profit
Example
Example inputs: Cost $60 and selling price $100.
Result: Gross profit: $40. Markup: 66.67%. Margin: 40%.
Frequently Asked Questions
What is the difference between markup and margin?
Markup uses cost as the denominator; margin uses selling price as the denominator.
Is markup higher than margin for the same sale?
For a positive profit, the markup percentage is generally higher because it divides profit by the lower cost base, while margin divides profit by the selling price.
What markup gives a 30% margin?
A 30% margin corresponds to a markup of about 42.86%, because markup = margin ÷ (1 − margin). The calculator can show the exact relationship for your inputs.
This calculator provides estimates for informational purposes only and should not be considered financial, tax, or legal advice.