Margin vs Markup Calculator
Compare margin vs markup using the same unit cost and selling price. The calculator shows profit, both percentages, and reconstructs the price so you can verify the difference.
Written and checked by TheToolNet Editorial Team · Last reviewed: September 27, 2026 · Editorial method
Calculate margin and markup
Margin and markup formulas
| Measure | Formula | With cost 60 and price 100 |
|---|---|---|
| Profit | price − cost | 40 |
| Margin | profit ÷ price | 40% |
| Markup | profit ÷ cost | 66.67% |
Convert without cost and price
Using decimals, margin = markup ÷ (1 + markup). Markup = margin ÷ (1 − margin). Therefore a 25% markup is a 20% margin, while a 25% margin requires a 33.33% markup.
Which one should you use?
Margin expresses profit as a share of selling price and is common in financial reporting. Markup expresses the amount added to cost and is common in pricing workflows. Label the percentage clearly so a target margin is not mistakenly applied as markup.
Costs still need careful definition
The arithmetic only reflects the cost entered. Decide whether unit cost should include freight, payment fees, packaging, labor, commissions, returns, or allocated overhead. Test the full sales level with the break-even point calculator.
Frequently asked questions
Can margin exceed 100%?
Not with a positive selling price and ordinary cost. Markup can exceed 100% because its denominator is cost.
What happens when selling price is below cost?
Profit, margin, and markup are negative, indicating a loss per unit.