Markup and margin are not the same number, and confusing them is one of the most common pricing mistakes in service work. Enter a cost and a markup to see the margin it really produces.
Selling price$150.00
Profit$50.00
Margin on selling price33.3%
Markup needed to earn that % as margin100.0%
How it is calculated
- Selling price = cost × (1 + markup ÷ 100)
- Margin = profit ÷ selling price × 100, which equals markup ÷ (100 + markup) × 100
- Markup needed for a target margin = margin ÷ (100 − margin) × 100
Worked example
With the starting values shown in the calculator:
- Cost: $100.00
- Markup: 50%
- Selling price: $150.00
- Profit: $50.00
- Margin on selling price: 33.3%
- Markup needed to earn that % as margin: 100.0%
Using the result
Markup is profit as a percentage of cost. Margin is profit as a percentage of the selling price. The last result shows the markup you would need if you wanted the percentage you entered to be your margin instead.
This calculator gives an estimate for planning. See the calculator disclaimer.
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