Margin & Markup Calculator — Calculate Profit, Margin and Markup
Use this margin and markup calculator to calculate profit, profit margin, markup percentage, selling price or cost. Margin and markup both describe profit, but margin compares profit with selling price while markup compares profit with cost.
Enter a cost price and a selling price to see profit, margin and markup.
The key distinction
Margin vs Markup: What's the Difference?
Margin and markup both express profit as a percentage, but they divide by different numbers. Margin divides profit by the selling price. Markup divides profit by the cost.
Take a cost of £80 and a selling price of £100, giving a profit of £20:
Margin
20 ÷ 100 × 100 = 20%
Profit as a share of the selling price.
Markup
20 ÷ 80 × 100 = 25%
Profit as a share of the cost.
The common mistake is treating the two as interchangeable. They are not:
£80 + 20% markup = £96
Profit = £16. Margin = 16 ÷ 96 × 100 ≈ 16.67%.
A 20% markup is not the same as a 20% margin. Adding 20% to the cost gives a 20% markup, but only a 16.67% margin, because the profit is now measured against the larger £96 selling price. To hit a 20% margin on an £80 cost you must charge £100, which is a 25% markup. The Percentage Change Calculator is the right tool when you simply want the growth from cost to selling price as a single signed figure.
Reference
Formula reference
Profit
Profit = Selling price − Cost
Margin %
Margin % = Profit ÷ Selling price × 100
Markup %
Markup % = Profit ÷ Cost × 100
Selling price from target margin
Selling price = Cost ÷ (1 − Margin ÷ 100)
Divide by the margin multiplier, never just add the percentage — that gives markup. See the Reverse Percentage Calculator for the same divide-by-the-multiplier idea applied to other problems.
Selling price from markup
Selling price = Cost × (1 + Markup ÷ 100)
Cost from selling price and margin
Cost = Selling price × (1 − Margin ÷ 100)
The reverse of the margin pricing formula — recover the cost when you know the selling price and the margin you want to protect.
See it in action
Worked examples
Cost £80, sale £100
- Profit = 100 − 80 = £20
- Margin = 20 ÷ 100 × 100 = 20%
- Markup = 20 ÷ 80 × 100 = 25%
Answer: Profit £20, margin 20%, markup 25%
The classic case: the same £20 of profit is a 20% margin but a 25% markup, because each uses a different base.
Cost £70, target margin 30%
- Multiplier: 1 − (30 ÷ 100) = 0.70
- Selling price = 70 ÷ 0.70 = £100
- Profit = 100 − 70 = £30
- Markup = 30 ÷ 70 × 100 = 42.86%
Answer: Sale £100, profit £30, markup ≈42.86%
Pricing a product to hit a 30% margin target — note the markup is much higher than 30%.
Cost £40, markup 50%
- Multiplier: 1 + (50 ÷ 100) = 1.50
- Selling price = 40 × 1.50 = £60
- Profit = 60 − 40 = £20
- Margin = 20 ÷ 60 × 100 = 33.33%
Answer: Sale £60, profit £20, margin ≈33.33%
Applying a 50% markup and checking what margin it actually delivers — 33.33%, not 50%.
Cost £24, sale £40
- Profit = 40 − 24 = £16
- Margin = 16 ÷ 40 × 100 = 40%
- Markup = 16 ÷ 24 × 100 = 66.67%
Answer: Profit £16, margin 40%, markup ≈66.67%
A common retail ratio where the markup headline (66.67%) looks far more impressive than the margin (40%).
Cost £100, sale £80 (selling at a loss)
- Profit = 80 − 100 = −£20
- Margin = −20 ÷ 80 × 100 = −25%
- Markup = −20 ÷ 100 × 100 = −20%
Answer: Loss £20, margin −25%, markup −20%
Selling below cost — both margin and markup go negative, and the calculator treats this as a valid loss calculation.
Answers
Frequently asked questions
What is profit margin?
Profit margin is profit expressed as a percentage of the selling price. If you buy for £80 and sell for £100, the profit is £20 and the margin is 20 ÷ 100 × 100 = 20%.
What is markup?
Markup is profit expressed as a percentage of the cost. If you buy for £80 and sell for £100, the profit is £20 and the markup is 20 ÷ 80 × 100 = 25%.
What is the difference between margin and markup?
Both describe profit, but they use different bases. Margin divides profit by the selling price; markup divides profit by the cost. Because the selling price is always larger than the cost, the same profit gives a lower margin than markup.
How do I calculate profit margin?
Margin % = (Selling price − Cost) ÷ Selling price × 100. Subtract the cost from the selling price to get the profit, divide by the selling price, then multiply by 100.
How do I calculate markup?
Markup % = (Selling price − Cost) ÷ Cost × 100. Subtract the cost from the selling price to get the profit, divide by the cost, then multiply by 100.
How do I calculate selling price from target margin?
Selling price = Cost ÷ (1 − Margin ÷ 100). For a 30% margin on a £70 cost: 70 ÷ 0.70 = £100. Do not simply add 30% to the cost — that gives a 30% markup, not a 30% margin.
How do I calculate selling price from markup?
Selling price = Cost × (1 + Markup ÷ 100). For a 25% markup on an £80 cost: 80 × 1.25 = £100.
Is a 20% margin the same as a 20% markup?
No. A 20% markup on £80 gives a selling price of £96 and a margin of only 16.67%. A 20% margin on £80 gives a selling price of £100 and a markup of 25%. The two percentages are never equal for the same cost and selling price.
Can profit margin be negative?
Yes. If you sell below cost, the profit is negative and so is the margin. Selling at £80 what cost £100 gives a profit of −£20 and a margin of −25%.
Can profit margin be over 100%?
No. Margin is profit divided by selling price, and profit can never exceed the selling price, so margin tops out at 100% (when the cost is zero). A margin of 100% or more entered as a target is mathematically impossible and will be rejected. Markup, by contrast, can exceed 100%.
Keep going
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For the wider business context — growth rates, churn and conversion — read the Business percentage calculations guide.