Margin vs Markup Profit Calculator
Calculate profit margin and markup from cost and price — see both percentages side by side and work backwards to the price you need for a target margin or markup.
Profit per unit
$40.00
Margin (profit ÷ price)
40.0%
Markup (profit ÷ cost)
66.7%
Margin and markup are always different numbers for the same sale (except at 0%) — margin is profit as a share of what the customer paid, markup is profit as a share of what it cost you.
Work backwards: what price hits a target?
Price needed
$100.00
About this tool
How to use it
- Enter your cost per unit and the price you're selling it for (or plan to).
- Read profit, margin, and markup together — margin and markup are almost always different numbers for the same sale.
- To find the price that hits a specific target instead, use the "Work backwards" section: enter cost, a target percentage, and whether that target is a margin or a markup.
- Click Calculate, or just keep typing — everything updates live.
Why it matters
Margin and markup are both expressed as percentages and both come from the same profit figure, which is exactly why they get mixed up — a 50% markup and a 50% margin are not the same price at all (a $10 cost at 50% markup sells for $15; at 50% margin it sells for $20). Pricing a product off the wrong one of the two, even by a small amount, compounds across every unit sold.
When to use it
Setting a retail price and deciding whether to think in terms of markup (common in retail and wholesale, applied to cost) or margin (common in reporting and finance, applied to price). Checking whether a supplier's or a competitor's quoted percentage means what you assumed it meant. Working out what price is actually needed to hit a target profitability, not just guessing and checking.
Good to know
Margin = profit ÷ selling price. Markup = profit ÷ cost. Both use the same profit (price − cost) but divide by a different base, which is the entire source of the confusion this tool exists to clear up. A margin of 100% or more is mathematically impossible (it would require an infinite price for a fixed cost) and is rejected with an explanation rather than a nonsensical result; a markup has no such ceiling.
Common questions
What's the actual difference between margin and markup?
Margin divides profit by the selling price (what the customer paid); markup divides the same profit by the cost (what it cost you). For a $60 cost sold at $100, profit is $40 either way — but margin is 40% ($40 ÷ $100) while markup is 66.7% ($40 ÷ $60). They're only ever equal at 0%.
Which one should I use to set prices?
Retail and wholesale businesses usually think in markup (a known cost, multiplied up by a standard percentage). Margin is more common in financial reporting and target-setting, since it's expressed as a share of revenue, which is what income statements are built around. Neither is 'more correct' — just make sure you and whoever you're talking to mean the same one.
Why can't I enter a 100% target margin?
A 100% margin would mean the entire selling price is pure profit with zero cost recovered — mathematically that only happens at an infinite price for any cost above $0, so it's rejected with an explanation rather than shown as a broken or infinite number.
How do I find the price for a target markup instead of a target margin?
Use the 'Work backwards' section and select "Target is a markup" — the required price is calculated as cost × (1 + target ÷ 100), the direct inverse of the markup formula, unlike the margin case which divides rather than multiplies.
Does this account for taxes, fees, or shipping in the cost?
No — 'cost' here means whatever single number you enter. If you want margin/markup on your fully-landed cost (including fees and shipping), add those into the cost figure yourself before entering it.