Calculate selling price, markup, margin, and profit from your cost.
The same profit is a higher markup than margin because markup is based on cost.
| Markup | Margin |
|---|---|
| 10% | 9.1% |
| 20% | 16.7% |
| 25% | 20.0% |
| 33.3% | 25.0% |
| 50% | 33.3% |
| 100% | 50.0% |
Markup is profit expressed as a percentage of cost.
Markup = (Selling Price − Cost) ÷ Cost × 100
Cost $100 and selling price $125 is $25 profit and a 25% markup.
Profit margin is profit expressed as a percentage of selling price.
Margin = (Selling Price − Cost) ÷ Selling Price × 100
The same $100 cost and $125 selling price is a 20% margin.
Markup and margin both describe profit, but they use different starting points. Markup compares profit with cost. Margin compares profit with selling price.
A product that costs $100 and sells for $125 has a 25% markup and a 20% margin.
Selling Price = Cost × (1 + Markup Rate)
$100 cost with 25% markup: $100 × 1.25 = $125.
Selling Price = Cost ÷ (1 − Margin Rate)
$100 cost with 20% target margin: $100 ÷ 0.80 = $125. Adding 20% to cost would be a 20% markup, not a 20% margin.
On a $100 cost, a 20% markup produces a $120 selling price, $20 profit, and a 16.7% margin. A 20% margin produces a $125 selling price, $25 profit, and a 25% markup.
Cost-plus pricing starts with the cost of a product or service and adds a markup to determine the selling price.
This calculator measures margin based on the cost and selling price entered. It is most similar to gross margin on an individual product or service. It does not calculate company-wide net profit margin after operating expenses, interest, and taxes. See Gross Profit vs Net Profit for that distinction.
Put the selling price on an invoice with the Invoice Generator or check totals in the Invoice Calculator. For pricing a service, see How to Price Your Services or browse All Calculators.