🏷️ Markup Calculator
By ToolNimba Finance Team · Reviewed by ToolNimba Editorial Review, small-business and pricing content · Updated 2026-06-19
This calculator is an educational pricing aid, not financial, tax or accounting advice. It does not account for sales tax, shipping, payment-processing fees, returns, overheads or local regulations, all of which affect your real profit. Confirm your numbers with your own bookkeeping and a qualified accountant before setting prices.
Markup is how much you add to the cost of an item to set its selling price, expressed as a percentage of the cost. This calculator works both ways: enter a cost and a markup percentage to get the selling price and profit, or enter a cost and a selling price to find the markup percentage. It also shows the profit margin, so you can see both pricing views at once and avoid the classic mix-up between markup and margin.
What is the Markup Calculator?
Markup is the difference between what an item costs you and what you sell it for, written as a percentage of the cost. If a product costs $40 and you sell it for $60, the $20 difference is a 50% markup, because $20 is half of the $40 cost. The formula for the selling price is price = cost × (1 + markup ÷ 100), and to work backwards the markup percentage is (price − cost) ÷ cost × 100. Markup is the lever most retailers and makers actually pull, because they start from a known cost and decide how much to add.
Markup is not the same as profit margin, and confusing the two is one of the most expensive mistakes in pricing. Markup is measured against the cost, while margin is the same profit measured against the selling price. In the $40 to $60 example the markup is 50% but the margin is only about 33.3%, because $20 of profit is one third of the $60 price. The profit amount is identical, the denominator is what changes. A markup will always be a larger number than the margin it produces, so quoting a markup as if it were a margin makes a business look more profitable than it is.
Choosing a markup is a business decision, not just arithmetic. Your markup has to cover far more than the unit cost: rent, wages, packaging, marketing, payment fees, returns and the profit you actually want to keep. Different sectors settle on very different norms, from low single-digit-percent markups on fast-moving groceries to several hundred percent on jewellery or restaurant drinks. The right number is the one that keeps you competitive while leaving a margin large enough to run the business and grow.
When to use it
- Setting a retail or online selling price from a known wholesale or unit cost.
- Reverse-engineering the markup a supplier or competitor has applied when you know both cost and price.
- Comparing how a 30%, 50% or 100% markup changes your price and profit before you commit.
- Checking whether a quoted markup gives the profit margin your business actually needs.
How to use the Markup Calculator
- Pick a mode: "Cost + markup → price" to find the selling price, or "Cost + price → markup %" to find the markup.
- Enter the cost of the item.
- Enter the markup percentage (forward mode) or the selling price (reverse mode).
- Read off the selling price or markup, plus the profit, markup percentage and profit margin.
Formula & method
Worked examples
A product costs you $40 and you want a 50% markup. What is the selling price?
- Price = cost × (1 + markup ÷ 100)
- Price = 40 × (1 + 50 ÷ 100) = 40 × 1.5
- Price = $60.00
- Profit = 60 − 40 = $20.00
- Profit margin = 20 ÷ 60 × 100 = 33.33%
Result: Selling price $60.00, profit $20.00, markup 50%, margin 33.33%
An item costs $50 and sells for $75. What markup did that apply?
- Profit = price − cost = 75 − 50 = $25.00
- Markup % = profit ÷ cost × 100 = 25 ÷ 50 × 100
- Markup % = 50%
- Profit margin = 25 ÷ 75 × 100 = 33.33%
Result: Markup 50%, profit $25.00, margin 33.33%
Selling price, profit and margin for different markups on a $100 cost item
| Markup % | Selling price | Profit | Profit margin % |
|---|---|---|---|
| 10% | $110.00 | $10.00 | 9.09% |
| 25% | $125.00 | $25.00 | 20.00% |
| 50% | $150.00 | $50.00 | 33.33% |
| 100% | $200.00 | $100.00 | 50.00% |
| 150% | $250.00 | $150.00 | 60.00% |
Markup percentage and the profit margin it produces
| Markup % | Equivalent margin % |
|---|---|
| 15% | 13.04% |
| 25% | 20.00% |
| 33.3% | 25.00% |
| 50% | 33.33% |
| 100% | 50.00% |
| 200% | 66.67% |
Common mistakes to avoid
- Treating markup and margin as the same number. A 50% markup is not a 50% margin. The profit is measured against cost for markup and against the selling price for margin, so a 50% markup gives only a 33.3% margin. Charging a "50% margin" price when you meant markup leaves you short.
- Marking up only the unit cost. Your cost is rarely just the purchase price. Shipping, packaging, payment fees, storage and returns all eat into profit. Build these into the cost figure, or use a markup high enough to cover them, before you decide the price.
- Copying a competitor’s markup blindly. Two businesses can have very different costs, overheads and volumes. A markup that works for a high-volume retailer may not cover the expenses of a smaller maker, so use a competitor’s price as a reference, not a rule.
- Forgetting that a discount erodes a thin markup fast. On a small markup, even a modest discount can wipe out the profit entirely. On a 25% markup, a 20% price cut leaves almost nothing, so know your numbers before you run a sale.
Glossary
- Cost
- What the item costs you to buy or make, before any markup is added.
- Markup
- The amount added to the cost to set the price, expressed as a percentage of the cost.
- Selling price
- The final price you charge the customer: cost plus the markup amount.
- Profit
- The selling price minus the cost. The same dollar figure underlies both markup and margin.
- Profit margin
- Profit expressed as a percentage of the selling price, not the cost.
Frequently asked questions
How do I calculate markup?
Markup percentage is (selling price − cost) ÷ cost × 100. For example, an item that costs $40 and sells for $60 has a markup of (60 − 40) ÷ 40 × 100 = 50%. To go the other way, the selling price is cost × (1 + markup ÷ 100).
What is the difference between markup and margin?
Both measure the same profit, but against different bases. Markup is profit as a percentage of cost, while margin is profit as a percentage of the selling price. A 50% markup on a $40 item gives a $60 price and a 33.3% margin, because $20 profit is half the cost but only a third of the price.
How do I find the selling price from a markup?
Multiply the cost by 1 plus the markup as a decimal: price = cost × (1 + markup ÷ 100). A $40 item with a 25% markup sells for 40 × 1.25 = $50. This calculator does it instantly in forward mode.
Is a higher markup always better?
Not necessarily. A high markup raises profit per sale but can price you out of the market and cut your volume. The best markup balances a healthy margin against staying competitive, and it must still cover all your overheads, not just the unit cost.
How do I convert a markup to a margin?
Divide the markup by 1 plus the markup, as decimals: margin = markup ÷ (1 + markup). A 50% markup converts to 0.5 ÷ 1.5 = 0.333, or a 33.3% margin. The reference table on this page lists common conversions.
Does this calculator include sales tax or fees?
No. It works with the cost and selling price you enter and ignores sales tax, shipping and payment-processing fees. To price accurately, fold those costs into the cost figure or choose a markup large enough to cover them.
Sources
- Markup , Investopedia
- Pricing your product , U.S. Small Business Administration