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

This markup calculator works out the selling price, gross profit and profit margin you get when you add a markup percentage on top of what something costs you. Enter the cost price of an item or job and the markup percentage you plan to charge, and the tool instantly returns the selling price, the dollar gross profit, the markup, and the resulting margin, updating live as you adjust either figure. It is built for tradespeople, retailers and anyone quoting on cost-plus pricing who needs to see straight away what a chosen markup actually means in dollar terms, and how that markup translates into a margin percentage, since the two are easy to confuse and never equal the same number. A 50% markup, for example, always produces a lower margin percentage than 50%, because markup is measured against cost while margin is measured against the selling price you end up charging. Below the calculator you will find a worked example using the default $100 cost and 50% markup, the formulas used for each result, and a plain-English explanation of why markup and margin diverge as the percentage grows. The figures shown are GST-exclusive, so if you sell to the public you will need to add 15% GST on top using the GST calculator to reach your final retail price. Use this tool to check that your pricing still leaves a healthy margin after costs, not just a markup that looks generous on paper.

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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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