Complete guide: Margin and Markup
Updated:
Margin = (price − cost) ÷ price. Markup = (price − cost) ÷ cost. Cost 80 and price 100 produce profit 20, margin 20% and markup 25%. These percentages are not interchangeable because their bases differ.
For target margin, price = cost ÷ (1 − margin/100). For target markup, price = cost × (1 + markup/100). With positive costs a 100% margin cannot be reached and is blocked. Comparing a price below cost can show a loss.
Use amounts from the same period and currency without exchange conversion. Separate customer-collected taxes from revenue when applicable and do not also include a fee under another expense. Initial business amounts are examples, not your company's data.
How it works
- 1Enter cost and comparison mode.
- 2Compare price or specify a target margin/markup.
- 3Distinguish money profit and percentage base.
Frequently asked questions
Is a 25% markup a 25% margin?
No. With cost 80 and price 100, markup is 25% but margin is 20%.
Does the link preserve my inputs?
Yes. Amounts, currency and options are included in the shared link to reproduce the calculation. Recipients can see those inputs.