Margin vs Markup Calculator
Markup divides profit by cost; margin divides the same profit by the selling price. Different denominators, different numbers. Add 50% to a cost of 100 and you sell at 150 with 50 of profit — a margin of 50÷150, or 33.33%. Backwards, a 40% margin means the price is cost divided by 0.6, so the markup has to be 66.67%.
Your numbers
Margin this markup gives
33.33%
Markup this margin needs
66.67%
Price as a multiple of cost
1.5×
What it means
A 50% markup is a 33.33% margin. The other way round, a 40% margin needs a 66.67% markup.
Formula
Margin = Markup ÷ (100 + Markup) × 100, Markup = Margin ÷ (100 − Margin) × 100
When a supplier says "40% margin", establish which one they mean. Hear it as markup, add 40% to cost, and your margin lands at 28.6% — eleven points under target.
What to enter
| Input | Default | Accepted range |
|---|---|---|
| Markup (%)Profit divided by cost. This one can exceed 100%. | 50 | 0 ~ 1,000 |
| Margin (%)Profit divided by the sale price. It can never exceed 100%. | 40 | 0 ~ 99.9 |
Step by step
Quick reference table
Results when only Markup (%) changes and everything else stays put.
| Markup (%) | Margin this markup gives (%) | Markup this margin needs (%) | Price as a multiple of cost (×) |
|---|---|---|---|
| 25 | 20 | 66.67 | 1.25 |
| 37.5 | 27.27 | 66.67 | 1.375 |
| 50 | 33.33 | 66.67 | 1.5 |
| 75 | 42.86 | 66.67 | 1.75 |
| 100 | 50 | 66.67 | 2 |
What each result means
| Result | At default values |
|---|---|
| Margin this markup gives (%)The share of revenue left when you sell at that markup — always smaller than the markup. | 33.33 |
| Markup this margin needs (%)What you must add to cost to hit that margin — always larger than the margin. | 66.67 |
| Price as a multiple of cost (×)Price as a multiple of cost; a 50% markup makes it 1.5×. | 1.5 |
Common mistakes
When a supplier says "40% margin", establish which one they mean. Hear it as markup, add 40% to cost, and your margin lands at 28.6% — eleven points under target.
Glossary
- Markup
- Profit divided by cost. This one can exceed 100%.
- Margin
- Profit divided by the sale price. It can never exceed 100%.
- Margin this markup gives
- The share of revenue left when you sell at that markup — always smaller than the markup.
- Markup this margin needs
- What you must add to cost to hit that margin — always larger than the margin.
- Price as a multiple of cost
- Price as a multiple of cost; a 50% markup makes it 1.5×.
Frequently asked questions
Q. How is Margin vs Markup Calculator calculated?
Margin = Markup ÷ (100 + Markup) × 100, Markup = Margin ÷ (100 − Margin) × 100 — Markup divides profit by cost; margin divides the same profit by the selling price. Different denominators, different numbers. Add 50% to a cost of 100 and you sell at 150 with 50 of profit — a margin of 50÷150, or 33.33%. Backwards, a 40% margin means the price is cost divided by 0.6, so the markup has to be 66.67%.
Q. Can you walk through an example?
With Markup 50%, Margin 40%, the answer is Margin this markup gives 33.33%.
Q. What do I need to enter?
Enter Markup, Margin. The result recalculates as you type, and an empty box counts as zero.
Q. How much does the answer move if I change a number?
Changing only Markup (%) moves the answer to Markup (%) 25 → Margin this markup gives (%) 20 and Markup (%) 100 → Margin this markup gives (%) 50. The table below lays out five steps.
Q. How are the numbers rounded?
Money is shown to the nearest whole unit, percentages to one decimal place and everything else to two. What you see is rounded; the calculation itself carries the unrounded value forward.
Q. Anything to watch out for?
When a supplier says "40% margin", establish which one they mean. Hear it as markup, add 40% to cost, and your margin lands at 28.6% — eleven points under target.
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