Markup Calculator - Pricing, Profit, and Margin Analysis

Calculate a selling price, gross profit, markup percentage, and profit margin from cost and either a selling price or markup rate.

Enter cost and one pricing input to check the relationship between markup and margin.

Markup Calculator
Provide cost with a selling price or desired markup percentage.

About the Markup Calculator

Markup is the amount added to the cost of a product or service to arrive at a selling price. It can be stated in dollars, but businesses most often express it as a percentage of cost. A $20 item sold for $30 earns $10 of gross profit. Dividing $10 by the $20 cost produces a 50 percent markup. This calculator can work in either direction: enter cost and selling price to discover the markup, or enter cost and a desired markup to calculate a target selling price. Markup is useful for building a price list because cost is usually the figure a business controls most directly. A buyer knows the invoice amount, shipping, packaging, and other variable costs, then applies a standard markup or category-specific markup. The resulting price needs to cover more than the item’s direct cost over time. It must contribute to rent, salaries, marketing, technology, taxes, returns, and the owner’s required return. Profit margin is related but different. Margin divides gross profit by the selling price instead of by cost. The $10 profit on a $30 sale is a 33.33 percent margin, not a 50 percent margin. Confusing the two measures can lead to underpricing, particularly when a target margin is entered as though it were a markup. The markup required to reach a specific margin is margin divided by one minus margin, expressed as a percentage. The calculator gives priority to the selling price when both optional inputs are supplied. That lets you audit an actual transaction without an inconsistent target markup changing the answer. To price an item from a target rate, leave selling price blank and provide the markup percentage. The tool then adds that percentage of cost to cost. Negative price inputs are not meaningful for ordinary product pricing and should be reviewed separately as credits or returns. Use fully loaded variable cost whenever possible. A merchant selling through a marketplace may need to include transaction fees, pick-and-pack charges, freight, and expected returns. A restaurant might include ingredients, waste, and serving materials. The markup calculator reports gross results only; it does not calculate taxes, fixed overhead, financing, or net income. Review those factors before finalizing an advertised price.

Markup Examples

Typical cost and price combinations.

InputsResultNote
Cost $20; selling price $3050.00% markup; 33.33% marginA standard retail example.
Cost $800; selling price $1,00025.00% markup; 20.00% marginA lower markup on an expensive item.
Cost $5; markup 300%$20.00 selling price; 75.00% marginA food-service pricing example.

How to Use the Markup Calculator

  1. Enter the total unit cost.
  2. Enter an actual selling price, or leave it blank and enter a markup percentage.
  3. When both are present, the selling price is used to calculate the actual markup.
  4. Select Calculate to view price, profit, markup, and margin.
  5. Use Reset before entering another product.

Markup Calculator FAQ

What is the markup formula?

Markup percentage equals selling price minus cost, divided by cost, multiplied by 100. Selling price equals cost times one plus the markup rate when you start from a target percentage.

What is the difference between markup and margin?

Markup is based on cost. Margin is based on revenue, or selling price, so the same profit dollars produce a lower margin percentage than markup percentage.

Which input should I use to set a new price?

Enter cost and your desired markup percentage, leaving the selling-price field blank. If both optional fields are filled, the actual selling price is used to audit the realized markup.

Does the result include sales tax?

No. Add sales tax according to your local rules after setting the pre-tax selling price. Tax is a statutory add-on, not part of markup.

Can a markup be zero?

Yes. A zero markup produces a sale price equal to cost and therefore no gross profit. Use that case only when you intend to break even on the unit.

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