Free Accounting Tool

Markup Calculator

Enter a cost plus either the markup or target margin to instantly get the selling price, profit, and the converted margin/markup percentage.

$

What it costs you to acquire or produce one unit

%

Markup % of cost added to get the price

Pricing

Selling price

$140.00

Profit per unit
$40.00
Markup
40.00%
Gross margin
28.57%

Markup is profit as a % of cost. Margin is profit as a % of selling price. A 100% target margin is mathematically unreachable because cost would need to be zero.

Frequently asked questions

What is markup?

Markup is the amount you add to your cost to set a selling price, expressed as a percentage of cost. If something costs $10 and you mark it up 50%, you sell it for $15. Markup is "cost-plus" pricing, common in retail and wholesale.

How is markup different from margin?

Margin is profit as a percentage of selling price; markup is profit as a percentage of cost. They use the same dollar profit but a different denominator. A 50% markup yields a 33.3% margin. A 100% markup yields a 50% margin.

How do I calculate selling price from a target margin?

Selling price = cost ÷ (1 − margin %). For a 40% target margin on a $60 cost: $60 ÷ (1 − 0.40) = $100. Use the "I know my margin" mode above to do this automatically.

How do I convert markup to margin?

Margin % = markup % ÷ (1 + markup %). So a 25% markup is a 20% margin. A 50% markup is a 33.3% margin. A 100% markup is a 50% margin. The relationship is non-linear, which is why the conversion trips people up.

What markup should I use for my product?

It depends on industry. Apparel and gift retail commonly run 100-200% markups (keystone). Grocery is typically 10-25%. Restaurants mark food up 200-300% to cover labor. Reverse-engineer it: pick the gross margin you need to cover overhead and profit, then convert to markup.

Does this include sales tax or shipping?

No. This calculator works on the wholesale/cost-to-list-price relationship. Sales tax is collected on the selling price, not added to it. Shipping should be either included in your cost (lowering margin) or charged separately to the customer.

Sources