Markup calculator

What is a markup calculator?

A markup calculator is a free online tool that helps you work out the relationship between the cost of a product and its selling price. Markup is the amount you add on top of the cost to arrive at the price you charge a customer, and it is usually expressed as a percentage of the cost. With this calculator you can solve for whichever value you are missing: enter any two of cost, markup and selling price, and the tool returns the third along with the resulting profit and profit margin. It is a practical aid for retailers, wholesalers, freelancers and anyone who needs to set prices that reliably cover costs and generate a return.

Why markup matters

Setting the right markup is one of the most important pricing decisions a business makes. Too low, and you may sell plenty of units while barely covering your costs; too high, and you risk pricing yourself out of the market. Because markup is measured against cost, it is easy to apply consistently across a catalogue of products with different cost bases. A clear markup policy lets a business protect its profitability when supplier prices change, plan promotions without eroding returns, and compare the contribution of different product lines on a like-for-like basis.

Markup versus margin

Markup and margin describe the same gap between cost and price, but they use different denominators, so the two percentages are never equal for a profitable sale. Markup expresses profit as a percentage of cost, while margin expresses profit as a percentage of the selling price. For example, a product bought for $80 and sold for $100 has a markup of 25% but a margin of 20%. Mixing them up is a common and costly mistake: a “50% markup” leaves a much thinner slice of revenue than a “50% margin.” This calculator shows both figures at once so you can see exactly how they relate.

How does the calculator work?

Pick the value you want to find from the Calculate menu, then fill in the other two fields. The calculator applies the appropriate rearrangement of the markup formula and instantly displays the result, the profit per unit, and the margin.

The core formula for markup is:

$$\text{Markup (\%)} = \frac{\text{Price} - \text{Cost}}{\text{Cost}} \times 100$$

Rearranged to find the selling price from cost and markup:

$$\text{Price} = \text{Cost} \times \left( 1 + \frac{\text{Markup (\%)}}{100} \right)$$

And to find the cost from price and markup:

$$\text{Cost} = \frac{\text{Price}}{1 + \dfrac{\text{Markup (\%)}}{100}}$$

The supporting outputs are calculated as:

$$\text{Profit} = \text{Price} - \text{Cost} \qquad \text{Margin (\%)} = \frac{\text{Price} - \text{Cost}}{\text{Price}} \times 100$$

Examples

Example 1: find the markup

A shop buys an item for $80 and sells it for $100. The markup is:

$$\text{Markup (\%)} = \frac{100 - 80}{80} \times 100 = 25\%$$

The profit is $20 per unit and the corresponding margin is 20%.

Example 2: find the selling price

A maker spends $80 producing an item and wants a 25% markup. The selling price is:

$$\text{Price} = 80 \times \left( 1 + \frac{25}{100} \right) = \$100$$

Example 3: find the cost

A reseller lists a product at $100 with a known markup of 25%. The underlying cost is:

$$\text{Cost} = \frac{100}{1 + \dfrac{25}{100}} = \$80$$

Notes

1. Cost basis: Markup is always measured against cost, so make sure the cost you enter includes everything you want covered before profit.
2. Negative markup: A markup below zero means you are selling below cost, which produces a loss rather than a profit.
3. Markup is larger than margin: For any profitable sale the markup percentage will be higher than the margin percentage, because cost is smaller than price.
4. Consistency: Apply the same markup logic across products so that margins stay predictable as costs shift.

FAQs

What is the difference between markup and margin?

Markup measures profit as a percentage of the cost, while margin measures the same profit as a percentage of the selling price. Because price is larger than cost on a profitable sale, the margin percentage is always smaller than the markup percentage for the same transaction.

How do I convert markup to margin?

You can convert markup to margin with the formula margin = markup / (100 + markup) × 100. For instance, a 25% markup corresponds to a 25 / 125 × 100 = 20% margin.

Can markup be more than 100%?

Yes. A markup above 100% simply means the selling price is more than double the cost. High markups are common for products with strong branding, low unit costs, or significant overhead to recover.

Which markup percentage should I use?

There is no universal figure; the right markup depends on your industry, competition, overhead and demand. Use the calculator to test different markups and see the resulting price, profit and margin before committing to a price.