Markup and Margin Calculator
Calculate price, profit, markup, and gross margin.
Calculate markup and margin
Pricing result
Gross profit
- Cost
- $80.00
- Selling price
- $100.00
- Markup on cost
- 25%
- Gross margin on price
- 20%
Gross profit is selling price minus cost. Depending on the mode you choose, one of those two is entered and the other is derived. Overhead, taxes, fees, and discounts are excluded.
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Calculate markup without confusing it with margin
Choose the values you know: cost and price, cost and markup, or selling price and target margin. The calculator derives gross profit and both percentages.
Markup uses cost as its denominator. Margin uses selling price. For an item costing $80 and selling for $100, gross profit is $20, markup is 25%, and gross margin is 20%.
The two are not interchangeable, and they do not share a ceiling. Markup has no upper limit: a 50% markup is a 33.3% margin, and a 200% markup is a 66.7% margin. Margin cannot exceed 100%, because profit can never be more than the whole selling price, and it reaches 100% only when the cost is zero. That asymmetry is why quoting a target as “50%” is ambiguous until you say which one you mean.
Pricing limitations
Entered cost should include the costs you intend to analyze. The output does not automatically include overhead, labor, transaction fees, taxes, returns, discounts, or desired net profit.
Frequently asked questions
What is the difference between markup and margin?
Markup divides gross profit by cost, while gross margin divides gross profit by selling price. The same transaction therefore produces different percentages.
How do I calculate price from a target markup?
Multiply cost by one plus the markup rate. A 25% markup on an $80 cost produces a $100 selling price.
How do I calculate cost from a target margin and price?
Multiply selling price by one minus the margin rate. A $100 price at a 20% gross margin implies an $80 cost.
Does gross profit include operating expenses or taxes?
No. This tool uses selling price minus entered cost. It does not account for net profit, taxes, payment fees, overhead, returns, or discounts.