What this calculator does
Markup is the percentage added to cost to set a selling price. This calculator helps compare the marked-up price with the resulting profit margin.
Formula used
Selling price equals cost multiplied by one plus the markup percentage. Margin equals profit divided by selling price.
How to read the result
Markup and margin are often confused. A 50% markup does not create a 50% margin because the margin uses selling price as the denominator.
Assumptions
- Uses cost and markup only.
- Does not include VAT, shipping, discounts, returns or overhead allocation.
- Treats markup as a percentage of cost.
Sources and checks
This calculator uses a standard public formula. Where rules or thresholds can change, source links are listed on the relevant page.
Frequently asked questions
Is markup the same as margin?
No. Markup is based on cost. Margin is based on selling price. The same sale will usually have a higher markup percentage than margin percentage.