Markup vs Margin Calculator – Convert Between Markup and Profit Margin
Convert between markup percentage and profit margin. Understand the critical difference, calculate selling price from cost, and avoid the most common pricing mistake in business.
📈 Business📐 Margin % = Markup% / (100 + Markup%) × 100 | Markup% = Margin% / (100 - Margin%) × 100
Cost price ($)
Markup % (enter one OR the other)
Profit margin % (enter one OR the other)
Please enter valid values.
Formula & Reference
| Variable | Formula | Units |
|---|---|---|
| Markup vs Margin Calculator – Convert Between Markup and Profit Margin | Margin % = Markup% / (100 + Markup%) × 100 | Markup% = Margin% / (100 - Margin%) × 100 | % |
Step-by-Step Examples
Example 1
Retail Product
Cost $40, markup 50%.
- Selling price: $60
- Margin: 50/150 = 33.3% (NOT 50%!)
- Profit: $20
✓ $60 selling price / 33.3% margin
Example 2
Find Markup from Margin
Cost $25, target 40% margin.
- Markup = 40/(100-40) = 66.7%
- Selling price: $25/(1-0.40) = $41.67
- Profit: $16.67
✓ $41.67 price / 66.7% markup
Example 3
SaaS Pricing
Cost $8, 75% margin target.
- Markup = 75/25 = 300%
- Selling price: $8/(0.25) = $32
- Profit: $24 per unit
✓ $32 price / 300% markup
Real-World Applications
Business Owners
Price products correctly — know the real difference between markup and margin.
Finance Teams
Convert between markup and margin without errors.
Sales Teams
Understand what discount percentages do to profit margin.
Accountants
Verify pricing models use the correct profitability metric.
Common Mistakes to Avoid
⚠️
Using markup and margin interchangeably
A 50% markup gives you a 33.3% margin — NOT 50%. Confusing these is the #1 pricing mistake. Always specify which metric you mean.
⚠️
Applying discounts without checking margin impact
A 10% discount on a 20% margin product wipes out half the profit. Calculate the impact on margin before approving any discount.
Frequently Asked Questions
What is the difference between markup and margin? ▾
Markup = Profit ÷ Cost × 100. Margin = Profit ÷ Revenue × 100. Same profit, different denominators. A $20 profit on $40 cost = 50% markup. The same $20 profit on $60 revenue = 33.3% margin.
Why does markup always appear higher than margin? ▾
Because markup divides by the smaller number (cost), while margin divides by the larger number (selling price). They can only be equal if cost is zero, which is impossible.
What margin do I need to hit a 50% markup? ▾
50% markup = 33.3% margin. Formula: Margin = Markup / (100 + Markup) × 100.
What markup do I need for a 40% margin? ▾
Markup = 40 / (100 - 40) × 100 = 66.7% markup. Formula: Markup = Margin / (100 - Margin) × 100.
What is a good profit margin by industry? ▾
Grocery: 2-5% net. Restaurant: 3-9% net. Software: 60-80% gross. Retail: 20-50% gross. Services: 50-70% gross. Always compare gross vs gross or net vs net.