Markup vs margin: the difference and how to calculate both

Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. Cost 800, price 1,000: markup = 200 / 800 = 25%, margin = 200 / 1,000 = 20%.

Markup—
Margin—

Formula: Markup = (P − C) / C × 100; margin = (P − C) / P × 100

Open the full tool: Percentage calculator →

Markup to margin chart

MarkupMargin
10%9.09%
15%13.04%
20%16.67%
25%20%
30%23.08%
40%28.57%
50%33.33%
60%37.5%
75%42.86%
100%50%
150%60%
200%66.67%
300%75%

Same profit, two percentages

The profit is the same number, but it is divided by different bases. So margin is always lower than markup and never reaches 100%, while markup can be 300% or more.

Converting between them

Margin = markup / (100 + markup) × 100; markup = margin / (100 − margin) × 100. A 25% markup is a 20% margin, a 50% margin is a 100% markup.

Pricing for a target margin

Price = cost / (1 − margin/100). For a 30% margin on a cost of 700 the price must be 700 / 0.7 = 1,000. Adding a 30% markup instead gives 910 and only a 23% margin.

FAQ

What is the difference between markup and margin?

Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price.

Can margin exceed 100%?

No, as long as cost is positive — profit cannot be larger than the price. Markup has no upper limit.

How do I convert markup to margin?

Margin = markup / (100 + markup) × 100. A 50% markup is a 33.33% margin.

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