Calculate profit margin and markup together from cost and price, and finally separate the two numbers that business conversations constantly confuse with each other. Runs entirely in your browser — your numbers never leave this device.
| Target margin | Required price | Profit per sale |
|---|---|---|
| 10% | $66.67 | $6.67 |
| 20% | $75.00 | $15.00 |
| 30% | $85.71 | $25.71 |
| 40% | $100.00 | $40.00 |
| 50% | $120.00 | $60.00 |
| Markup | Price | Resulting margin |
|---|---|---|
| 10% | $66.00 | 9.09% |
| 25% | $75.00 | 20% |
| 50% | $90.00 | 33.33% |
| 75% | $105.00 | 42.86% |
| 100% | $120.00 | 50% |
Margin and markup are not the same number: margin is profit as a share of the price, markup is profit as a share of the cost. A 50% markup is only a 33.33% margin.
Margin and markup measure the same profit against two different bases, and confusing them is one of the most expensive small mistakes in pricing. Margin divides the profit by the selling price — it answers 'what share of each sale is profit?' Markup divides the same profit by the cost — it answers 'by what percentage did I mark the cost up?' Because the price is always larger than the cost, the margin is always the smaller percentage of the pair, and the calculator always displays both so neither can be mistaken for the other.
The difference is not pedantry. If you want a 40% margin on an item costing $60 and you mistakenly apply a 40% markup instead, you price at $84 rather than $100 and surrender $16 of profit on every sale. The third example runs that exact pair both ways, and the reverse formula — price equals cost divided by (1 minus the target margin) — is included so you can start from the margin you need and get the price that delivers it.
This calculator works at the level of a single product or transaction (gross margin: price minus the direct cost of the item). It does not subtract overheads, rent or taxes, which belong to net margin at the whole-business level. Mixing the two is another classic error: a healthy product margin can still leave a thin net margin once fixed costs take their share, which the Break-Even Calculator helps you see.
Same profit, different denominator. Margin divides profit by the selling price; markup divides profit by the cost. On a $60 cost and $100 price, the $40 profit is a 40% margin and a 66.67% markup. Whenever someone quotes a percentage on a deal, knowing which of the two it is changes what the number means entirely.
Markup is measured against the cost, which profit can exceed several times over — a $10 cost sold at $100 carries a $90 profit and a 900% markup ((100 − 10) / 10 × 100 = 900%). Margin is measured against the price, and profit is a part of the price, so it can approach but never reach 100% (that would require a cost of zero). A margin quote and a markup quote are therefore not interchangeable at any size.
Margin, if your targets are expressed as shares of revenue (as most financial reporting does); markup, if your habit is adding a percentage to supplier prices. The safe practice is to compute both, as this calculator does, and to state explicitly which one a quote, a target or a negotiation is using — most margin disputes turn out to be the two sides using different measures.
Gross, at product level: price minus the direct cost of what was sold. Net margin subtracts all the business's other costs — rent, wages, marketing, tax — from total profit before dividing by total revenue, and is always lower. This calculator gives the per-item gross pair; combine it with your fixed costs in the Break-Even Calculator to see how product margins translate into business profit.
There is no universal figure: it varies enormously by industry, from a few percent in high-volume grocery retail to well over half the price in software and services. Any page quoting one right answer is selling something. What this calculator can do is make your own margin exact and comparable — against your other products, your past prices and your break-even requirement.
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