Markup vs Margin Calculator
Shows the markup percentage and the margin percentage for the same sale, so you can see why one price has two very different percentages.
Recent
Formula
How the calculation works
The tool first subtracts the cost price and any other cost from the selling price to get the gross profit per sale.
It divides that gross profit by the cost price and multiplies by one hundred to return the markup percentage.
It then divides the same gross profit by the selling price and multiplies by one hundred to return the margin percentage.
Common mistakes
- Using markup and margin as if they were the same number, when a 50% markup is only a 33% margin.
- Applying the margin percentage to the cost price, when margin is always taken as a share of the selling price.
When to use it
- Check whether the markup you add actually leaves the margin you need after all purchase costs.
- Explain to a buyer why a 25% markup is only a 20% margin, using the real figures.
Worked example
A cost price of 100 and a selling price of 125 with no other cost give a gross profit of 25, a markup of 25 percent and a margin of 20 percent.
Common questions
Why is margin always lower than markup?
Margin divides profit by the larger selling price while markup divides it by the smaller cost price, so margin is always the lower figure.
Related tools
-
Invoice Total
The total on an invoice after a discount and a tax, with tax charged on the discounted amount.
-
Home Office Deduction Calculator
How much of a household bill a home workspace can claim, by area.
-
Commission Calculator
Works out the commission on a sale from the price and rate and shows the net amount left after the commission and any other deductions.
-
Daily Sales Balance Calculator (Bangladesh)
Adds up the day's cost of goods, delivery and other expenses and subtracts them from total sales to show the net amount left at closing time.
-
Distributor Margin Calculator (Bangladesh)
Compares the distributor price with the dealer price and shows the margin per unit plus the margin percentage after transport cost.
-
Ecommerce Profit Calculator (Bangladesh)
Subtracts product cost, delivery, cash-on-delivery charge and packaging from the sale price to show your true profit on one online order.
-
Inventory Reorder Calculator
Find the stock level that should trigger a new purchase by combining daily sales, supplier lead time and safety stock.
-
Restaurant Menu Costing
Builds a menu price from the ingredient cost by adding a wastage allowance, VAT and a service charge.