Free tool
Markup vs. margin calculator
Markup and margin both measure the same profit, but markup divides it by the cost and margin divides it by the price. So the same sale always has a bigger markup than margin.
Example numbers to start (example number: Made up to show how the calculator works). The starting numbers are made up, not real prices. Type your own: they stay on this page and aren't sent anywhere.
From a cost and a price
What you pay to make or buy one.
The price a customer pays for one.
Markup
150%
The $6.00 you add, as a share of the $4.00 cost.
Margin
60%
The same $6.00, as a share of the $10.00 price.
How it's worked out
Markup = (price − cost) ÷ cost. → $6.00 ÷ $4.00 = 150%
Margin = (price − cost) ÷ price. → $6.00 ÷ $10.00 = 60%
Turn one into the other
Type in either box; the other one changes to match.
A 50% markup is a 33.3% margin.
How it's worked out
Margin = markup ÷ (1 + markup). → 50% ÷ (100% + 50%) = 33.3%
Learn the idea behind it
A calculator gives you the number. The lesson shows you what it means and what to do about it.
Free lesson
Margins: where each dollar goes
Follow a sale down to profit, see why the same dollars make a bigger markup than margin, and compare three businesses' margins.
Take the lessonMore free calculators
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For learning, not financial advice. See all the tools.