About this calculator
Doubling your costs is not the same as making a 50% margin. A 50% markup on a $100 cost gives a $150 price, which is a 33.3% margin, not 50%. Confusing the two leaves you working much harder than you think for the business you actually run.
How it works
Enter either a markup or a target margin and the calculator solves for the correct selling price, then shows you the true margin and markup side by side so there is no ambiguity left.
Frequently asked questions
What is the difference between markup and margin?
Markup is profit divided by cost. Margin is profit divided by selling price. Because the denominators differ, the two numbers are never equal, and the gap widens as the markup increases.
How do I convert markup to margin?
Margin = Markup ÷ (1 + Markup). So a 50% markup becomes 0.5 ÷ 1.5 = 33.3% margin. A 100% markup becomes 50% margin, and a 200% markup becomes 66.7%.
How do I convert margin to markup?
Markup = Margin ÷ (1 − Margin). So a 40% margin means 0.40 ÷ 0.60 = 66.7% markup. A 60% margin means a 150% markup.
What markup should I use?
It depends on your costs and market. Software and digital products often run 5 to 10× markup because costs are near zero. Physical retail goods are closer to 30 to 50%. Research your category before deciding.
Why does markup matter more than margin in retail?
Because costs scale with volume while the markup applies per unit. A 30% margin on a high-volume item and a 70% margin on a low-volume item can produce identical profit, so mix matters as much as rate.
Should I include labour in my markup?
Yes, if you want a true picture. Fully loaded labour cost including salary, benefits, and overhead belongs in the base. Excluding it makes the real margin on service work much lower than it appears.