Margin and Markup Calculator
Convert between gross margin and markup, and find the selling price you need to hit a target margin or markup on a given cost.
Formula and method
Profit = price − cost.
Margin % = (profit ÷ price) × 100. Markup % = (profit ÷ cost) × 100.
Price for a target margin = cost ÷ (1 − margin ÷ 100). Price for a target markup = cost × (1 + markup ÷ 100).
Worked example
A product costs €60 and sells for €100, so profit is €40.
Margin = 40 ÷ 100 = 40%. Markup = 40 ÷ 60 = 66.67%.
To reach a 40% margin from a €60 cost: €60 ÷ 0.6 = €100.
FAQ
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. The same €40 profit on a €60 cost and €100 price is a 40% margin but a 66.7% markup.
How do I calculate the price for a target margin?
Price = cost ÷ (1 − margin ÷ 100). A €60 cost at a 40% target margin needs a €100 price.
Why is a 100% margin impossible?
It would require the cost to be zero. As the target margin approaches 100% the required price rises without limit.
Does this include VAT?
No. Work with figures excluding VAT, then add VAT to the final selling price separately.
Which should I price on?
Margin is the more useful measure for profitability because it relates directly to revenue. Markup is often easier to apply at the point of pricing.
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