Margin and markup describe the same profit from two different angles, and mixing them up quietly wrecks your pricing. Enter a cost and a price to see both percentages, or enter a target margin or markup to get the price you should charge. Everything is worked out in your browser.
Enter the values to see margin and markup.
How it works
Profit is simply price minus cost. Margin expresses that profit as a share of the selling price (profit ÷ price), while markup expresses it as a share of the cost (profit ÷ cost). Because the denominators differ, markup is always the larger number — a 20% margin is the same deal as a 25% markup.
In “from margin” mode the price is derived as cost ÷ (1 − margin), which is why a margin can never reach 100%: that would mean selling at an infinite price for zero cost. In “from markup” mode the price is cost × (1 + markup), so a 50% markup on a 200 cost gives 300.
The calculator rounds money and percentages to two decimals and is currency-neutral — the numbers work the same whether you think in dinars, euros or dollars. A price below cost is allowed and shown as a negative profit and margin, so you can see how deep a loss a discount would create.
Practical examples
Retail: cost 800, sold for 1200
Choose “from price”, enter 800 and 1200. Profit is 400, the margin is 33.33% (400 ÷ 1200) and the markup is 50% (400 ÷ 800). The single deal, described two ways.
Pricing to a 30% margin
Your product costs 700 and you need a 30% margin. Choose “from margin”, enter 700 and 30, and the price comes out at 1000 — that is a 42.86% markup on the cost.
Applying a standard 25% markup
A distributor adds 25% to everything. Choose “from markup”, enter a cost of 1600 and 25, and the shelf price is 2000 — which is only a 20% margin, a reminder that markup always reads higher.
Frequently asked questions
What is the difference between margin and markup?
Both measure the same profit but against different bases. Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. Since price is larger than cost, the markup percentage is always higher than the margin for the same sale.
Why can’t the margin be 100%?
A 100% margin would mean the entire selling price is profit and the cost is zero. Since the price is derived as cost ÷ (1 − margin), a margin of 100% divides by zero. Markup, by contrast, has no upper limit.
How do I convert a markup into a margin?
Margin = markup ÷ (1 + markup). A 25% markup is 0.25 ÷ 1.25 = 20% margin. To go the other way, markup = margin ÷ (1 − margin). This tool does the conversion for you — enter one and read the other.
Is the profit shown before or after tax?
It is gross profit on a single item: price minus cost, before VAT, overheads, salaries or other expenses. It tells you the trading margin per unit, not your bottom-line net profit.
Should I enter prices with or without VAT?
Be consistent — use the net (pre-VAT) cost and net price for a true trading margin, since VAT is not your money. If you enter VAT-inclusive figures the percentages still compute, but they no longer reflect real profitability. The VAT Calculator can strip VAT first.
What does a negative result mean?
If the price is below the cost, profit and margin turn negative — you would be selling at a loss. The tool shows this in red so a too-aggressive discount is obvious before you commit to it.
Which percentage do retailers usually quote?
It varies by trade. Retail and finance often speak in margin because it ties directly to revenue; wholesalers and trades frequently use markup because they build price up from a known cost. Always confirm which one a figure refers to.
Can I use it for services, not just products?
Yes. Treat your delivery cost (materials, subcontractors, billable hours at cost) as the cost and your quote as the price. The margin then shows how much of each invoice is profit.
Does anything I type get saved?
No. All the math happens in your browser and nothing is uploaded or stored. Close the tab and the figures are gone.
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