Markup vs Margin Calculator
Compare markup and margin side by side
Key difference: Markup is the profit as a percentage of cost. Margin is the profit as a percentage of selling price (revenue). A 50% markup is only a 33.33% margin.
Results are estimates and may not reflect your actual financial situation. This is not financial, tax, or legal advice. Consult a qualified professional.
How to use
Choose your calculation mode: enter cost and selling price, cost and markup %, or cost and margin %. The calculator shows both markup and margin side by side so you can see exactly how they differ. Use the mode tabs to switch between input methods.
Formula
Examples
50% markup is not 50% margin
A product costs $100 with a 50% markup. Selling price is $150, profit is $50. But the margin is only 33.33% ($50/$150). This is the most common confusion in pricing. Markup is always higher than margin for the same dollar profit.
Restaurant pricing
A dish costs $8 in ingredients. Restaurants typically target 65-70% margin, meaning the selling price should be $22.86-$26.67. That is a 186-233% markup. The wide gap between markup and margin numbers is why using the wrong one can destroy profitability.
Retail keystone markup
Keystone pricing means 100% markup (double the cost). A $20 wholesale item sells for $40. The margin is 50%. This is common in retail as a starting point, but actual margins vary by product category and competition.
Frequently asked questions
What is the difference between markup and margin?
Markup is profit as a percentage of cost (what you paid). Margin is profit as a percentage of selling price (what the customer pays). For the same dollar profit, markup is always a larger number than margin. A 100% markup equals a 50% margin, a 50% markup equals a 33.33% margin.
Which should I use for pricing?
Use markup when calculating prices from cost (how much to charge). Use margin when analyzing profitability and comparing to industry benchmarks. Most financial statements report margins, while purchasing teams think in markups. Know both and convert between them.
Can margin ever exceed 100%?
No. Margin is profit divided by selling price, so it is always between 0% and 100% (since profit is always less than revenue). Markup has no upper limit: selling a $1 item for $10 is a 900% markup but only a 90% margin.
What is a good profit margin?
It depends on the industry. Software/SaaS: 70-90%. Retail: 25-50%. Restaurants: 3-9% net, 60-70% on food. Manufacturing: 20-35%. Service businesses: 15-30%. Compare your margin to direct competitors, not across industries.
How do I convert between markup and margin?
Markup to margin: divide markup by (100 + markup) and multiply by 100. Margin to markup: divide margin by (100 minus margin) and multiply by 100. Example: 50% markup = 50/(100+50) x 100 = 33.33% margin.
About this tool
Understand the difference between markup and margin. Enter cost and price to see both percentages side by side. Convert between markup and margin instantly.
All calculations are performed locally in your browser. Your data never leaves your device.