How it works
Markup starts from cost, so applying it is straightforward multiplication. The margin that results is always a smaller percentage than the markup, because margin measures the same profit against the larger selling price rather than the smaller cost — see the Gross Margin Calculator for the same relationship worked the other direction.
selling price = cost × (1 + markup ÷ 100)
profit = selling price − cost
resulting margin = profit ÷ selling price × 100
Worked example
An item that costs $60, marked up 50%.
- Selling price: $60 × 1.50 = $90.
- Profit: $90 − $60 = $30.
- Resulting margin: $30 ÷ $90 = 33.3%.
A 50% markup on a $60 cost sets a $90 price, which works out to a 33.3% margin — not 50%, since margin and markup are measured against different bases.
Common questions
I want a 50% margin — what markup do I need?
A 50% margin needs a 100% markup, not 50% — because a 50% margin means profit equals half the selling price, which means profit equals the full cost. This is the most common markup/margin mix-up in pricing, and exactly why this calculator shows both numbers rather than just one.
Why would I set price by markup instead of margin?
Because cost is usually the number you already know when pricing an item, so applying a straight multiplier to it is the more direct calculation. Working backward from a target margin to a price takes an extra division step, which is exactly what this calculator does for you.