Margin & Markup Calculator
From the cost and a target profit margin, work out the selling price, the profit and the corresponding markup percentage.
Input Data
Results
At a glance:Margin (profit margin) is profit expressed as a percentage of the selling price; markup is profit expressed as a percentage of the cost. They are different: a 50% margin is not a 50% markup. For cost C and margin% m, price = C ÷ (1 − m ÷ 100), profit = price − C, and markup% = profit ÷ C × 100.
Formula
Price = cost ÷ (1 − margin% ÷ 100).
Profit = price − cost.
Markup% = profit ÷ cost × 100.
$$\text{Markup} = \dfrac{\text{Price} - \text{Cost}}{\text{Cost}} \times 100\%$$How to Use
- Enter the unit cost.
- Enter the target profit margin (%).
- Read the selling price, profit and markup percentage.
FAQ
What is the difference between margin and markup?
Both describe the profit on a deal, but with different denominators. Margin = profit ÷ selling price (price as denominator); markup = profit ÷ cost (cost as denominator). Because the selling price is always greater than the cost, the markup is always higher than the margin for the same transaction. For example, with a cost of HK$100 and price of HK$166.67, the profit of HK$66.67 gives a margin of 40% but a markup of 66.67%.
If I want a 40% margin, can I just multiply the cost by 1.4?
No — that is the most common pricing trap. Cost × 1.4 means a 40% markup, not a 40% margin. With a HK$100 cost, cost × 1.4 gives a HK$140 price, where the HK$40 profit is only a 28.6% margin. To truly hit a 40% margin, use cost ÷ (1 − 0.4) = HK$166.67. In short, a '40% margin' corresponds to a 66.67% markup, not a 40% markup.
Why can't the target margin be set to 100%?
By definition margin = profit ÷ price, so a 100% margin would require the profit to equal the entire price, i.e. a zero cost. In the formula, price = cost ÷ (1 − margin), and at 100% the denominator becomes zero, which is undefined and would push the price to infinity. That is why the calculator caps the target margin at 99% — beyond that the price becomes absurdly large and unrealistic.
Does a high margin automatically mean the business is profitable?
Not necessarily. Margin only deducts the direct cost of the goods; it does not yet cover rent, wages, marketing, platform commissions, shipping, returns, interest and tax. A business can show a healthy margin yet thin or negative net profit after operating expenses. When setting a target margin, leave enough room for these downstream costs so that 'on-paper margin' does not mask an actual loss.
How do I convert between margin and markup quickly?
Use the relationship: markup = margin ÷ (1 − margin), and margin = markup ÷ (1 + markup). For example, a 40% margin corresponds to a 66.67% markup; a 50% markup corresponds to a 33.3% margin. This calculator shows both figures at once so you can see the conversion instantly and avoid confusing the two in pricing discussions.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.