Markup calculator
Put a percentage on your cost and out comes the price. And next to it, the margin you actually keep, which is always smaller and almost nobody works out.
Your figures
Result
- Cost$6066.7%
- Profit$3033.3%
- Profit per unit
- $30.00
- Real margin you keep
- 33.33%
From cost to price
| Item | Amount |
|---|---|
| Cost | $60.00 |
| Profit | $30.00 |
| Selling price | $90.00 |
What we assume
- Markup is applied to the cost, not to the final price.
- Cost means the full unit cost, fees and shipping included.
- Figures are excluding sales tax.
- Later discounts are not considered, and a large one eats the whole margin.
How it is calculated
Markup is a percentage added on top of the cost:
selling price = cost × (1 + markup / 100)
At £60 cost and a 50% markup: 60 × 1.5 = £90.
And here is the part that surprises people
You made £30 on a price of £90, so your margin is 33.3%, not 50. Applying a 50% markup does not leave a 50% margin, and that gap of nearly seventeen points is where a lot of small businesses quietly go wrong.
The relationship between the two is this:
margin = markup / (100 + markup) × 100
A few equivalences worth carrying in your head:
- 25% markup → 20% margin
- 50% markup → 33.3% margin
- 100% markup → 50% margin
- 200% markup → 66.7% margin
To reach a 50% margin you have to double the cost, not add half of it.
Why use markup at all if it misleads
Because it is convenient. In a shop with hundreds of lines, applying a fixed multiplier to whatever each item costs you is fast and needs no per-product arithmetic. The problem is not using it, it is confusing it with margin when talking to the bank, to a partner, or to yourself.
The discount that eats it
On a 50% markup, a 20% discount off the selling price takes £18 of your £30 profit: you keep £12 and the margin falls from 33% to 16.7%. Worth looking underneath before announcing a sale.
An example
A product costing £60 with a 50% markup sells for £90. Profit is £30 and the real margin is 33.33%.
Frequently asked questions
What markup do I need for a particular margin?
Turn the formula around: markup = margin / (100 − margin) × 100. For a 40% margin you need a 66.7% markup; for 50%, a markup of 100%.
Can markup go above 100%?
Yes, and it often does. Hospitality and cosmetics routinely run markups of 200 or 300%. Margin, by contrast, can never exceed 100%, because it is a share of the price.
Is markup applied before or after sales tax?
Before, always on the tax-exclusive cost. Tax is added at the end to the price you have already worked out, and it is part of neither your cost nor your profit.
Does it work for services, not just products?
It does, taking your hours at what they cost you as the cost. What usually goes wrong in services is forgetting non-billable hours - quoting, admin, training - which easily run to a third of the time and have to be covered by the markup on the rest.
Keep calculating
All tools →- Profit margin calculator Margin and markup come from the same two numbers and are not the same size. Here you get both at once, which is the only way to stop confusing them.
- Sales commission calculator Base pay, percentage, and the threshold where it starts counting. With the effective percentage at the end, which is the only way to compare two offers.
- VAT calculator Add VAT to a price, or strip it out of one that already includes it. With the net and tax split, which is what an invoice needs.
Updated on 2026-09-10. Calculations run in your browser; nothing you type is sent to a server.