Markup Calculator
Add a markup to a cost to get the selling price, and see the profit and the margin it leaves.
What this calculates
Markup is the amount you add to what something cost you, written as a percentage of that cost. It is how most prices are actually set: take the cost, add a third, that is the price. This calculator does that sum and then shows what it leaves you — the profit in money, and the profit margin, which is the same profit measured against the selling price instead of the cost. The margin is always the smaller of the two percentages, so it is worth checking before you promise anyone a margin figure.
Formula
selling price = cost × (1 + markup ÷ 100) profit = selling price − cost margin = profit ÷ selling price × 100
Example
An item costs 100 and you add a 25% markup. The price is 100 × 1.25 = 125, the profit is 25, and because that 25 is a fifth of the 125 the customer pays, the margin is 20%.
Frequently asked questions
Markup vs margin — why are they different numbers?
Both describe the same profit, but against different bases. A cost of 100 sold at 125 makes 25 profit: 25 out of the 100 cost is a 25% markup, while 25 out of the 125 price is a 20% margin. Markup is always the larger figure because the cost is always smaller than the price.
What markup do I need for a 50% margin?
100%. To keep half the selling price as profit, the price has to be double the cost. In general, the markup needed is margin ÷ (100 − margin) × 100 — so a 30% margin needs a 42.86% markup, and a 20% margin needs 25%.
Can a markup be negative?
Yes, and it means selling below cost — a clearance price or a loss leader. A −20% markup on a cost of 100 gives a price of 80 and a loss of 20. Below −100% the price would fall past zero, which would mean paying people to take the goods, so the calculator stops there.
Should the markup go on top of the VAT-inclusive cost?
No. Work with costs and prices before VAT, then add VAT to the finished price. If you are VAT registered the VAT on your purchases is reclaimed, so it is not part of your cost, and marking it up would inflate the price for no reason.