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Margin Calculator

Calculate profit margin and markup percentages with a side-by-side comparison.

Margin calculator

Solve for

Enter cost and price — we’ll compute margin & markup.

Cost
$
Selling price
$

Examples

How It Works

Profit margin and markup are two different ways to express the profitability of a product or service. They are often confused, but they use different denominators.

Margin expresses profit as a percentage of the selling price (revenue). A 40% margin means 40 cents of every dollar of revenue is profit. Formula: Margin = (Selling Price − Cost) / Selling Price × 100.

Markup expresses profit as a percentage of the cost. A 66.7% markup means you added 66.7% on top of your cost. Formula: Markup = (Selling Price − Cost) / Cost × 100.

For the same cost and selling price, the markup percentage is always higher than the margin percentage (except when profit is zero). For example, if you buy something for $60 and sell it for $100: the profit is $40, the margin is 40% ($40/$100), and the markup is 66.7% ($40/$60).

To convert between them: Margin = Markup / (1 + Markup), and Markup = Margin / (1 − Margin).

Tips & Best Practices

Margin is always lower than markup for the same transaction — don't confuse the two when setting prices.
A 50% margin means you sell at double your cost (100% markup).
Most retail businesses target margins between 20–50%, depending on industry and overhead.
To quickly estimate: if your markup is 100%, your margin is 50%. If markup is 50%, margin is 33.3%.
When negotiating with suppliers, a small reduction in cost has a proportionally larger impact on margin.

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Frequently Asked Questions

What is the difference between margin and markup?

Margin is profit as a percentage of selling price (revenue), while markup is profit as a percentage of cost. For the same transaction, markup is always the larger number. If you buy for $60 and sell for $100, margin is 40% and markup is 66.7%.

Divide cost by (1 − margin%/100). For example, if cost is $60 and desired margin is 40%: $60 / (1 − 0.40) = $60 / 0.60 = $100 selling price.

It depends on industry. Grocery stores operate on 1–3% margins, restaurants aim for 3–9%, software companies can achieve 60–80%, and luxury goods may reach 50–70%. Compare against your industry benchmarks.

No, margin cannot reach or exceed 100% because that would require the cost to be zero or negative. Markup, however, can exceed 100% — a 200% markup means you tripled the cost.

Margin = Markup / (1 + Markup). Markup = Margin / (1 − Margin). For example, a 50% markup = 50/150 = 33.3% margin. A 25% margin = 25/75 = 33.3% markup.