Markup calculator · Free tool

What is markup?

Markup is how much you add on top of your cost to get your price. If something costs you $40 and you add 50%, you add $20 and charge $60.

Markup and margin are not the same

Both use the same profit, but they divide it by different numbers. Markup divides by the cost; margin divides by the price. On the $60 sale above, the markup is 50% but the margin is only 33.3%. Mixing them up is a common way to price too low: a 30% markup does not keep 30% of the price.

Markup	Margin
25%	20%
50%	33.3%
100%	50%
150%	60%
200%	66.7%

The formulas

Price from markup: cost × (1 + markup)
Price from margin: cost ÷ (1 − margin)
Markup from margin: margin ÷ (1 − margin)

Pricing tips

Start from the margin you need to pay your overheads and yourself, then work back to the price. Check it against what customers pay elsewhere. Review prices when your costs go up; your books show you when that happens.

Frequently asked questions

How do I work out a 30% markup?

Multiply the cost by 1.3. A $50 cost with a 30% markup is a $65 price.

What markup gives a 50% margin?

A 100% markup. You double the cost: a $40 cost sold for $80 keeps $40, which is half the price.

Why is my margin lower than my markup?

Margin divides the profit by the price, which is bigger than the cost. So the margin is always lower than the markup for the same sale.

Should I price with markup or margin?

Margin is better for planning, because your overheads and profit are paid out of the price. Markup is quicker at the till. The calculator does both, so use the one you think in.

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