What this calculator does
Profit margin and markup are related, but they are not the same. This calculator shows both so pricing decisions are easier to compare.
Formula used
Gross profit equals selling price minus cost. Margin equals gross profit divided by selling price. Markup equals gross profit divided by cost.
How to read the result
Margin is usually the clearer metric for reporting, while markup is often used when setting prices from a known cost base.
Assumptions
- Uses gross cost and selling price only.
- Does not include VAT, platform fees, shipping, returns or overhead allocation.
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
Why is markup higher than margin?
They use different denominators. Margin divides profit by selling price, while markup divides profit by cost.