Markup Calculator
Free online markup calculator for businesses, sellers, and entrepreneurs. Calculate selling price from cost and markup percentage, find markup percentage from cost and price, or determine the cost that gives you a specific selling price. Includes a detailed markup vs margin comparison and typical markup percentages by industry.
- $50.00 × 60% = $30.00 (markup amount)
- $50.00 + $30.00 = $80.00 (selling price)
- Margin = $30.00 / $80.00 × 100 = 37.5%
Markup vs Margin: what’s the difference?
Markup and margin both describe the same profit, but they use different denominators. That single difference is the source of one of the most common confusions in business math.
Markup is calculated as a percentage of cost: Markup % = (Selling price − Cost) / Cost × 100. Margin is calculated as a percentage of selling price: Margin % = (Selling price − Cost) / Selling price × 100.
The same transaction yields different numbers. Cost $50, selling price $75, profit $25 → markup is 50%, margin is 33.33%.
| Aspect | Markup | Margin |
|---|---|---|
| Formula | (Price − Cost) / Cost × 100 | (Price − Cost) / Price × 100 |
| Denominator | Cost (what you paid) | Price (what you charge) |
| Used in | Manufacturing, wholesale, retail | Finance, accounting, reporting |
| Maximum value | No limit (200%, 500%, 1000%+) | Caps at 100% (theoretically) |
| Always larger? | Yes, for any profitable sale | Always smaller than markup |
Markup → margin conversion
| Markup | Margin |
|---|---|
| 10% | 9.1% |
| 25% | 20% |
| 50% | 33.3% |
| 75% | 42.9% |
| 100% | 50% |
| 150% | 60% |
| 200% | 66.7% |
| 300% | 75% |
| 500% | 83.3% |
A coffee shop pays $0.50 for the materials in a cup of coffee and sells it for $4.00. Markup: ($4.00 − $0.50) / $0.50 × 100 = 700%. Margin: ($4.00 − $0.50) / $4.00 × 100 = 87.5%. Both numbers describe the exact same transaction.
How to calculate markup
Markup is the percentage added to the cost of a product to set its selling price. It’s the basic mechanism by which retailers and businesses make profit on their inventory.
The markup formula is Markup % = (Selling price − Cost) / Cost × 100. To calculate selling price from cost and markup: Selling price = Cost × (1 + Markup% / 100). An item costing $40 with a 75% markup sells for $40 × 1.75 = $70, with $30 of profit per unit.
Optimal markup varies by industry, business model, and competitive positioning. High-volume categories like groceries and fuel run on 5–30% markup, standard retail typically lands at 50–100%, and restaurants commonly mark up food 200–400% with beverages even higher.
Higher markup does not equal higher profit. Markup needs to cover not just the cost of goods, but also overhead — rent, labor, marketing, packaging, returns, and payment processing — and still leave a net profit. A 100% markup sounds great, but if your overhead is 60%, your real profit is only 40%.
The most common mistake is confusing markup with margin. Markup is a percentage of cost; margin is a percentage of price. A 50% markup is only a 33.33% margin. Mixing the two leads to underpricing and unsustainable businesses — see the comparison below for the full picture.