Method
How to calculate markup
Both percentages use the same gross profit but different denominators. That is why a 50% markup does not produce a 50% margin.
FORMULAMarkup = profit ÷ cost; margin = profit ÷ selling price
Worked example
Markup vs margin calculator example
A product costing $60 and selling for $100 creates $40 gross profit: 66.67% markup and 40% margin.
Change one assumption at a time to see what drives the result. The output is an estimate, not a quote, forecast or recommendation.
FAQ
Markup vs margin calculator FAQ
Why is markup higher than margin?
Markup uses the smaller cost base while margin uses the selling price.
What price gives a target margin?
Divide cost by one minus the target margin expressed as a decimal.
Should pricing use markup or margin?
Use the measure your operating model and reporting consistently follow; this tool shows both without prescribing one.