Markup calculator

The markup formula

Selling price = cost × (1 + markup ÷ 100). A cost of 100 with a 50% markup sells for 150, which is 50 of profit. Because that profit is 50 out of a 150 price, the margin is 33.3%, not 50%.

Markup vs. margin

• Markup is profit as a percentage of cost. It is what you add on top.
• Margin is profit as a percentage of the selling price. It is what you keep from each sale.
• Margin is always lower than markup. A 100% markup is only a 50% margin.

Mixing them up is one of the most common pricing mistakes: a business that wants a 40% margin and adds a 40% markup ends up with only a 28.6% margin. To start from a target margin instead, use the profit margin calculator.

Choosing a markup

Typical markups vary widely: retail goods often use 50–100%, restaurants far more on drinks, contractors 10–25% on materials. Work out your overheads first, then make sure the markup covers them and leaves a profit. If you sell your time, start from your hourly rate. When offering a sale, see how far you can go with the discount calculator.

Frequently asked questions

What is the difference between markup and margin?

Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A 50% markup on a cost of 100 gives a price of 150 and a margin of 33.3%.

How do I calculate markup from cost and price?

Subtract cost from the price, divide by cost and multiply by 100. A product that costs 40 and sells for 60 has a 50% markup.

What is a good markup percentage?

It depends on the industry and your overheads. Many retailers use 50% or more, while service businesses and contractors often work with lower percentages on materials.

How do I mark up materials on an invoice?

List the materials as separate line items at the marked-up price, or show the cost and markup separately if your client expects a cost-plus invoice.