What is the markup formula?

Markup = (selling price − cost) ÷ cost × 100%.

What is the margin formula?

Margin = (selling price − cost) ÷ selling price × 100%.

Why is markup higher than margin?

Both use the same profit, but markup divides by cost, which is smaller than the selling price.

What markup gives a 50% margin?

A 100% markup: doubling the cost gives a price at which half is profit.

Markup vs Margin Formula and Calculator

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Markup vs Margin Calculator

Markup and margin both describe the profit on a sale, but they divide by different numbers. Markup expresses the profit as a percentage of the cost; margin (gross margin) expresses it as a percentage of the selling price. Because cost is smaller than price, markup is always the larger of the two for a profitable sale, and mixing them up is one of the most common pricing mistakes.

Formula

Markup = Price − CostCost × 100% Margin = Price − CostPrice × 100%

Where

Price: selling price
Cost: what the item costs you
Price − Cost: gross profit per item

Calculator

Cost

Selling price

Result and step-by-step solution

Markup

66.67%

Gross margin 40% on the same sale. Markup is always the larger number because it divides by the smaller base (cost).

Profit per item
100.00 − 60.00 = 40.00
Markup (on cost)
40.0060.00 = 66.6667%
Margin (on price)
40.00100.00 = 40%

How to use the formula

Buy an item for 60 and sell it for 100, and the profit is 40. The markup is 40 ÷ 60 = 66.67%, while the margin is 40 ÷ 100 = 40%. A shop owner who aims for a 40% margin but adds 40% to cost would set a price of 84 and earn only a 28.6% margin.

Retailers and wholesalers often think in markup, because they start from the cost of stock; accountants and investors talk in margin, because the income statement starts from revenue. This calculator gives both for any cost and price. To convert a target margin into the markup you need, or back, use the margin to markup converter. For the margin of a whole business, see the gross profit margin.

Frequently asked questions

What is the markup formula?: Markup = (selling price − cost) ÷ cost × 100%.
What is the margin formula?: Margin = (selling price − cost) ÷ selling price × 100%.
Why is markup higher than margin?: Both use the same profit, but markup divides by cost, which is smaller than the selling price.
What markup gives a 50% margin?: A 100% markup: doubling the cost gives a price at which half is profit.

Last reviewed: September 26, 2026. Calculations run in your browser and were checked against numpy-financial, SciPy and published spreadsheet examples.