Business calculator

Free markup calculator

Enter cost and selling price — this markup calculator returns markup percentage, gross margin, and shows why the two are never the same number, updated live, as you type.

On this page10 sections

InputsLive

Method

Cost

Markup %

50% markup: cost × 1.50

Result

Selling price

$150

Profit: $50 · Markup: 50% · Margin: 33.3%

Price$150

Profit$50

Markup %50%

Margin %33.33%

Markup = profit ÷ cost. Margin = profit ÷ price. These are different numbers.

Results are estimates. Consult a professional.

How it's calculated

How the markup calculator works

Markup is the percentage added to the cost of a product to arrive at its selling price. It is expressed as a percentage of cost — not of price. Enter your cost and either your desired markup percentage or your target selling price, and the calculator returns the missing variable plus the equivalent gross margin percentage. Understanding which metric you are quoting is critical: markup and margin describe the same profit in dollars but as a percentage of different denominators.

Markup % = (selling price − cost) / cost × 100

Selling price = cost × (1 + markup% / 100)

Gross margin % = (selling price − cost) / selling price × 100

Margin from markup: margin% = markup% / (1 + markup% / 100)

Markup from margin: markup% = margin% / (1 − margin% / 100)

The key insight: markup and margin are never the same number (except at 0%). A 50% markup yields a 33.3% margin. A 100% markup (doubling the price) yields a 50% margin. Salespeople who quote margins and buyers who think in markups will consistently talk past each other unless both clarify which base is being used.

Corporate Finance Institute — Markup vs. Margin: What's the Difference?

Example

Worked example: 50% markup on a $40 product

Example: cost $40, markup 50%

A retailer buys a product for $40 and applies a 50% markup. The selling price and the resulting gross margin percentage are calculated below.

Selling price = $40 × (1 + 0.50) = $60.00

Gross profit = $60.00 − $40.00 = $20.00

Gross margin % = $20.00 / $60.00 × 100 = 33.33%

$60.00 selling price / 33.3% margin

A 50% markup on a $40 cost yields a $60 selling price and a 33.3% gross margin — not 50%. To achieve a true 50% margin, you need a 100% markup.

Quick reference

Markup % → equivalent margin % and selling price ($100 cost)

The table below uses a $100 cost item to make the arithmetic visible. At any markup level you can read off the selling price and — critically — the gross margin percentage that the same profit dollar represents as a share of price.

Markup %	Selling price ($100 cost)	Gross margin %
10%	$110.00	9.1%
25%	$125.00	20.0%
50%	$150.00	33.3%
75%	$175.00	42.9%
100%	$200.00	50.0%
150%	$250.00	60.0%
200%	$300.00	66.7%

Source: Corporate Finance Institute; AccountingCoach. Margin % = markup% ÷ (1 + markup%).

Practical tips

Tips for setting and communicating markup

Pricing errors that stem from markup-vs-margin confusion are surprisingly common — including in industries that deal in millions of dollars of product. These five practices prevent the most expensive mistakes.

State your base explicitly. Whenever quoting a profit percentage, specify whether it is a percentage of cost (markup) or of price (margin). "We make 30%" is ambiguous; "we run a 30% gross margin" or "we mark up 30% from cost" is not.
Work backward from target margin. If your business needs a 40% gross margin, the required markup is 40 ÷ (1 − 0.40) = 66.7% — not 40%. Build your price list from the margin target, not a round markup number.
Cover all costs, not just COGS. Markup covers product cost. Operating expenses (rent, labor, shipping, returns, payment processing) must also be recovered. A healthy gross margin is not the same as a profitable business.
Benchmark by industry. Grocery retail runs 25–30% markup; electronics 5–10%; jewelry 100–200%; software (no COGS) effectively unlimited. Know your industry floor before setting prices.
Review markup when costs change. Fixed-markup pricing policies become margin-eroding policies the moment supplier costs rise. Re-run the calculator whenever input costs shift by more than a few percent.

Accuracy & limits

Accuracy and limitations

This calculator computes markup percentage, selling price, and gross margin percentage exactly using the standard formulas. Results are mathematically precise for the inputs provided. Rounding is applied only to the displayed output; full precision is maintained internally.

The tool models a single product at a single price point. It does not account for volume discounts, tiered pricing, price elasticity, promotional pricing, or the full cost stack (overhead, shipping, payment fees). Gross margin is a product-level metric — it does not indicate overall business profitability. Use this calculator as a pricing starting point and validate against your full P&L.

Glossary

Markup and pricing terms defined

The dollar amount or percentage added to the cost of a product to set its selling price. Always expressed as a percentage of cost.

Gross profit expressed as a percentage of selling price. Gross profit = selling price minus cost of goods sold (COGS).

The direct costs of producing or purchasing the product — materials, manufacturing, and freight-in. Does not include selling, general, and administrative expenses.

The price at which a product is offered to buyers. Equals cost × (1 + markup%).

Revenue minus COGS. The dollars remaining to cover operating expenses and generate net income.

How sensitive demand is to a change in price. A highly elastic product loses significant volume when prices rise, limiting how much markup is practically achievable.

About

About this markup calculator

This calculator runs entirely in your browser — nothing you enter is sent to any server.

Browse more in our business calculators, or explore the complete library on the free calculators page.

Questions

Frequently asked questions about the free markup calculator

A markup calculator is a free online tool that helps you calculate selling price from cost plus markup percentage — or derive markup from price and cost. Markup is expressed as a % of cost. Margin is expressed as a % of price. They are not the same. It runs entirely in your browser with instant results and no sign-up.

No — these calculators provide quick estimates for planning and decisions. For tax filings, financial reporting, or formal valuations, use a CPA / CFA.

Most ratios assume GAAP figures from financial statements. For cash-basis or tax-basis filings, adjust the inputs accordingly.

Core finance formulas (DCF, IRR, depreciation methods, payment math) are stable. Tax-specific calculators (like-kind, repossession) reflect post-TCJA / 2025 rules where applicable.