Calculate your markup
Use the same currency and cost basis throughout. Dollar examples use $. Amounts exclude sales tax; gross profit assumes your cost represents cost of goods sold. Results round to two decimals.
- Markup
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- Gross margin
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- Gross profit ($)
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- Selling price ($)
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Markup vs margin: the same profit, different bases
Buy an item for $50 and sell it for $75. Gross profit is $75 − $50 = $25. Markup compares that $25 to the $50 cost: 50%. Gross margin compares the same $25 to the $75 selling price: approximately 33.33%. Confusing the two can leave less gross profit than you planned.
Markup and margin formulas
- Gross profit = price − cost
- Markup % = (price − cost) / cost × 100
- Margin % = (price − cost) / price × 100
- Selling price = cost × (1 + markup % / 100)
Convert markup to margin
Margin % = markup % / (100 + markup %) × 100. For the same $50 cost and $75 price, 50 / (100 + 50) × 100 ≈ 33.33%. Conversely, markup % = margin % / (100 − margin %) × 100, for margin below 100%.
Worked markup examples
These are illustrative calculations, not industry benchmarks. Percentages are rounded to two decimals.
| Cost → price | Gross profit | Markup | Gross margin |
|---|---|---|---|
| $50 → $75 | $75 − $50 = $25 | $25 / $50 × 100 = 50% | $25 / $75 × 100 ≈ 33.33% |
| $50 → $100 | $100 − $50 = $50 | $50 / $50 × 100 = 100% | $50 / $100 × 100 = 50% |
| $80 → $100 | $100 − $80 = $20 | $20 / $80 × 100 = 25% | $20 / $100 × 100 = 20% |
| $100 → $80 | $80 − $100 = −$20 | −$20 / $100 × 100 = −20% | −$20 / $80 × 100 = −25% |
Using markup in a business plan
- Retail: Compare purchase costs with proposed prices, allowing for freight, discounts, returns and inventory losses in your assumptions.
- Food service: Cost recipes and portions consistently, consider waste, and check whether gross profit can cover staffing and premises.
- Contracting: Define the materials, labour and subcontractor costs included in a quote, then assess overhead, contingency and scope changes separately.
Markup alone does not establish net profit or cash flow. Test sales volume and fixed costs in your break-even and financial forecast, and budget setup costs with the grocery startup-cost worksheet if relevant to your business.
Markup calculator FAQs
What is the difference between markup and margin?
Markup divides gross profit by cost; margin divides it by selling price. At a $50 cost and $75 price, $25 gross profit gives 50% markup and approximately 33.33% margin.
Is 100% markup the same as 50% margin?
Yes. A $50 cost with 100% markup gives a $100 selling price and $50 gross profit. Markup is $50 / $50 × 100 = 100%; margin is $50 / $100 × 100 = 50%.
How do I find selling price from cost and target markup?
Selling price = cost × (1 + markup % / 100). For a $50 cost and 50% target markup, price = $50 × 1.5 = $75.
Does markup include overhead and tax?
Markup is calculated from the cost you enter; it does not automatically add overhead or sales tax. Define cost consistently, assess whether gross profit covers overhead, and generally use selling prices excluding sales tax. Treatment of recoverable and nonrecoverable taxes depends on your situation.
How do I convert markup to margin?
Margin % = markup % / (100 + markup %) × 100. A 50% markup gives 50 / 150 × 100 = approximately 33.33% margin.