Markup Calculator
Cost in, price out — and the margin your markup actually produces.
Markup and margin describe exactly the same dollars and produce two different percentages, which is why this markup calculator always prints both. Markup is profit divided by cost: buy for $40, sell for $64, and you marked it up 60%. Margin is profit divided by price, so that same $24 is a 37.5% margin. Confuse the two and you underprice everything — a business that needs a 40% margin but applies a 40% markup actually lands at 28.6% and bleeds quietly all year. Enter your cost plus whichever number you already have, and this returns the other, both ways round.
Markup vs margin — the difference that decides your price
- Markup divides profit by cost; margin divides profit by price. Same profit, different denominator — which is why margin is always the smaller of the two percentages.
- Converting a target margin into a markup: markup = margin ÷ (1 − margin). A 40% margin needs a 66.7% markup, not 40% — probably the most expensive arithmetic slip in small-business pricing.
- Converting the other way: margin = markup ÷ (1 + markup). A 50% markup is a 33.3% margin, and doubling your cost — a 100% markup — is exactly a 50% margin.
- Set markup from the margin your business requires, not from habit or from what the last owner charged. Decide what has to be left to cover overhead and profit, then work backwards to the multiplier.
- Use fully-loaded cost, not the invoice figure. Freight, payment processing, breakage, returns and warranty work are all part of what a unit really costs, and each one eats margin invisibly.
- Different products can carry different markups — that is normal and often correct. What has to hold steady is the blended margin across your mix, because that is what actually pays the fixed costs.
Example output
Cost + markup %: Cost per unit $40 · markup 60% · selling price left blank
Selling price: $64.00 Profit per unit: $24.00 Markup: 60.0% (profit ÷ cost) Gross margin: 37.5% (profit ÷ price) Same $24.00 of profit, two different denominators: a 60.0% markup is a 37.5% margin. Markup divides by cost, margin divides by price — so margin is always the smaller number.
Frequently asked questions
- Is markup the same thing as margin?
- No, and the gap widens as the numbers grow. Markup is profit ÷ cost; margin is profit ÷ price. A 60% markup is a 37.5% margin, and a 100% markup is a 50% margin. Quoting a markup as though it were a margin is how jobs get priced below the level the business needs to survive.
- What markup do I need for a 50% margin?
- A 100% markup — double your cost. The conversion is markup = margin ÷ (1 − margin), so 50% margin needs 0.5 ÷ 0.5 = 100%. A 40% margin needs 66.7%, and a 60% margin needs 150%. Enter the resulting price above and the calculator confirms where the margin actually lands.
- Can I work backwards from a price I already charge?
- Yes — leave the markup field blank and enter your selling price instead. You get the markup that price implies plus the margin it produces, so you can compare what you actually charge against what your pricing policy says. Fill in both fields and the price wins, with the implied markup called out explicitly.
- Why is this free — what's the catch?
- No catch and no signup. This tool is funded by EaseClaw, an AI agent that finds people publicly asking for what you sell and drafts your replies. If the free tool is useful, some people try the free trial. That's the whole business model.