What is the difference between markup and margin?

Markup is profit as a percentage of cost. Margin is profit as a percentage of the selling price. A product costing $100 sold for $150 has a 50% markup but a 33.3% margin. They describe the same dollar profit from different angles, so they are never the same number.

How do I calculate selling price from markup?

Multiply the cost by 1 plus the markup as a decimal. A $100 cost with a 50% markup is 100 times 1.5, which is a $150 selling price. The gross profit is $50.

How do I convert markup to margin?

Margin equals markup divided by (1 plus markup). A 50% markup is 0.5 divided by 1.5, which is 33.3% margin. The calculator shows both so you do not have to convert by hand.

Markup Calculator

Work out the selling price, gross profit, and margin from a cost and a markup. Enter what an item costs you and the markup percentage you want to apply, and the calculator shows the selling price, the dollar profit, and the profit margin. It also makes the difference between markup and margin clear, which trips a lot of people up.

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Cost price

Markup

$150.00

selling price

Gross profit$50.00

Markup50%

Margin33.3%

Prices are GST-exclusive. Use the GST Calculator to add 15% GST for a retail price.

Markup vs margin

Markup is profit measured against your cost. Margin is profit measured against the selling price. They describe the same dollar profit from different ends, so they are never equal. A higher markup always gives a lower-looking margin.

Worked example

An item costs you $100. A 50% markup adds $50, for a $150 selling price. That $50 profit is 50% of the cost (markup) but 33.3% of the $150 price (margin).

The formulas

Selling price = cost times (1 + markup)
Gross profit = selling price minus cost
Margin = gross profit divided by selling price

Related calculators

Profit Margin Calculator: margin analysis on a sale.
Gross Margin Calculator: gross margin percentage.
Selling Price Calculator: price for a target margin.
GST Calculator: add 15% GST.

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