Convert Between Them
Results
Margin vs Markup Calculator Guide
Margin and markup describe the same profit and give completely different numbers. Confusing them is one of the most common and most expensive mistakes in pricing. This calculator shows both at once and converts between them.
Markup % = (Profit ÷ Cost) × 100 — profit compared to what you paid
Margin % = (Profit ÷ Price) × 100 — profit compared to what you charged
Converting: Margin = Markup ÷ (1 + Markup) · Markup = Margin ÷ (1 − Margin)
The $60 That Is Both 150% and 60%
Buy for $40, sell for $100. Profit is $60 either way. Divide it by the $40 cost and you get 150% markup. Divide it by the $100 price and you get 60% margin. Nothing changed but the denominator.
Someone wants a 50% margin, so they add a 50% markup. A $40 item becomes $60 — and that's a 33.3% margin, not 50%. They're short by a third of the profit they planned for, on every single sale. For a 50% margin they'd need a 100% markup and a $80 price.
The Conversion Table Worth Memorising
| Markup | Margin |
|---|---|
| 25% | 20.0% |
| 33.3% | 25.0% |
| 50% | 33.3% |
| 66.7% | 40.0% |
| 100% | 50.0% |
| 150% | 60.0% |
| 233% | 70.0% |
| 400% | 80.0% |
Notice the asymmetry: markup can exceed 100% happily, but margin can never reach it. Margin is a share of the price, so 100% margin would mean the item cost you nothing.
Which Should You Use?
Markup when pricing. You know what it cost; you're deciding what to charge. It's the forward-looking, operational number.
Margin when reporting and comparing. It's what accountants, investors and your P&L use, because it's a share of revenue and therefore comparable between products and businesses.
Both are correct. Trouble only starts when one person means one and the other hears the other — which is exactly why every pricing conversation should state which.
Where It Bites Hardest
Thin-margin businesses. At a 5% margin you can absorb almost nothing; at 60% you have room to discount. The higher your margin, the more a markup and margin figure diverge — and the more damage the confusion does.
See also our markup calculator and break-even calculator.
Need a Calculator We Don't Have Yet?
Can't find the calculator you need? We'll build it. Submit your request and we'll evaluate it for our growing collection.
Request Calculator