Markup vs Margin Calculator

Markup % = (price − cost) / cost. Margin % = (price − cost) / price. Common confusion.

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How to use this calculator

  • Enter cost + price.
  • Read both metrics.

About this calculator

Markup is profit as a % of cost. Margin is profit as a % of price. Always different. 100% markup = 50% margin (cost $50 → $100 sale). 25% markup = 20% margin. Retail typically quotes margin (cleaner % below 100); contractors quote markup ("our markup is 25%"). Don't mix them: 25% markup on a $100 cost = $125; 25% margin on $100 cost would require $133 selling price.

Frequently asked

When does markup = margin?+
Only at 0% (sell at cost). Always: markup > margin for profitable sales.
Convert markup to margin?+
margin = markup / (1 + markup). 100% markup = 50% margin. 25% markup = 20% margin.
Convert margin to markup?+
markup = margin / (1 − margin). 50% margin = 100% markup. 33% margin = 50% markup.
Industry standards?+
Restaurant food: 60-70% margin (3-4× markup). Retail apparel: 50% margin (100% markup). Big-box: 20-30% margin.
Why confused?+
Both expressed as percentages. Easy to swap. Always confirm which metric in pricing discussions.

Related calculators

Gross Margin
Gross margin % = (Revenue − COGS) / Revenue. Profit before operating expenses.
Contribution Margin
CM = Revenue − Variable Costs. CM ratio = CM / Revenue.
Break-Even Units
Units = Fixed Costs / (Price − Variable Cost per unit).
Customer Lifetime Value (LTV)
LTV = ARPU × gross margin × lifetime. Foundational SaaS unit economics.
CAC Payback Period
Months = CAC / (ARPU × gross margin). Time to recover acquisition cost.
Churn Rate Calculator
Monthly churn = customers lost / start customers. Annualized: 1 − (1−monthly)^12.

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