How to Calculate Markup
This calculator is for business markup - the difference between cost and selling price, expressed as a percentage of cost. It is the standard markup used in retail, wholesale, and service pricing. Markup as a term in printing, typography, or markup languages (HTML, XML) is a different concept and not covered here.
Markup tells you how much you add to your cost to set a selling price. A 50% markup on a $60 cost means you charge an extra $30, selling the item for $90. The percentage is always calculated against the cost, not the final price - that distinction separates markup from margin.
Profit = Selling Price - Cost
Markup = Profit ÷ Cost × 100%
Selling Price = Cost × (1 + Markup ÷ 100)
For a product that costs $60 to make and sells for $100:
- Profit = $100 - $60 = $40
- Markup = $40 ÷ $60 × 100% = 66.67%
The calculator works in any direction. Enter any two of the four values - cost, markup percentage, selling price, profit - and the other two are filled in automatically. To find the selling price from a target markup, enter cost and markup. To check what markup an existing price represents, enter cost and selling price.
Keep in mind: markup as a dollar amount and markup as a percentage are not the same. A $40 markup is a fixed amount; 40% markup means 40% of cost, which depends on what cost is. On a $60 cost, 40% markup adds $24 (selling price $84); on a $200 cost, 40% markup adds $80 (selling price $280). The calculator always uses the percentage form, and shows the dollar amount as the Profit value in the results.
Markup vs. Margin
Markup and margin describe the same profit from two different angles. Markup is profit as a percentage of cost; margin is profit as a percentage of revenue (selling price). The same $20 profit on a $100 sale represents a 25% markup but a 20% margin - different numbers, same transaction.
In practice, pricing decisions use markup ("add 50% to cost to set the price"), while profitability analysis uses margin ("we run at 33% margin"). Markup answers the seller's question "how much do I add"; margin answers the analyst's question "how much do I keep". The calculator shows both - markup as the main input or output, margin as a derived value in the results.
If you know one, you can always derive the other:
Margin = Markup ÷ (1 + Markup)
Markup = Margin ÷ (1 - Margin)
For quick reference, here are common conversions at a cost of $100. Notice how markup numbers grow much faster than margin: 100% markup means doubling the price, but the margin is only 50%.
| Markup |
Margin |
Selling Price |
| 10% |
9.09% |
$110 |
| 25% |
20% |
$125 |
| 50% |
33.33% |
$150 |
| 75% |
42.86% |
$175 |
| 100% |
50% |
$200 |
| 150% |
60% |
$250 |
| 200% |
66.67% |
$300 |
Frequently Asked Questions
What is the difference between markup and margin?
Markup and margin describe the same profit, but use different bases. Markup is calculated against cost ("how much I added"); margin is calculated against revenue ("how much I kept"). A $20 profit on a $100 sale is a 25% markup and a 20% margin - same transaction, two perspectives. For full margin calculations and a margin-to-markup conversion table, see our Margin Calculator.
What is a good markup percentage?
There is no single "good" markup - it depends heavily on the industry. According to research data from NYU Stern (Aswath Damodaran's Margins by Sector dataset, January 2026), typical markups across US industries range from about 12% in low-margin sectors like Auto & Truck to over 250% in Pharmaceuticals - and even higher in Software and SaaS. For example, Auto Parts runs around 19%, Air Transport around 33%, Building Materials around 45%, and Apparel around 132%. A useful rule of thumb: compare your markup to others in your specific industry rather than to a universal benchmark. A 25% markup would be excellent for an auto parts business but well below average for a software company.
How do I convert markup to margin?
Use the formula: Margin = Markup ÷ (1 + Markup). A 50% markup converts to 50 ÷ 1.50 = 33.33% margin; a 100% markup converts to 100 ÷ 2 = 50% margin. For other common values without doing the math, see the conversion table in the Markup vs. Margin section above.
Should I include overhead costs in markup calculation?
That depends on what you mean by "cost". Most markup calculations use direct cost - the cost of the goods or materials only, without overhead like rent, wages, or utilities. This gives a clean, fast number but requires a higher markup percentage to cover overhead and still leave a profit. Some businesses build overhead into the cost figure first (a "fully loaded" cost) and then apply markup; others keep markup tight on direct cost and ensure total markup across all products covers overhead separately. There is no single right approach - the key is being consistent so your prices actually cover all your real costs.
Other money-related calculators on Calculator-1.com:
- Margin Calculator - calculate margin from cost and revenue (or any two of cost, revenue, margin, profit). Shows both margin and markup side by side.
- Discount Calculator - calculate the sale price, savings, or discount amount from any two of the four values.
- Percent Off Calculator - find the final price when an item is marked a specific percent off the original.
- Tip Calculator - calculate the tip amount, total bill, and per-person split for any service percentage.
- Money Counter - count physical cash by entering the quantity of each banknote and coin denomination. Supports 10 currencies.
Disclaimer
This calculator and the information above are provided for general guidance only and do not constitute financial advice. Markup benchmarks vary by industry, business size, and stage - the percentages and examples described reflect typical values but are not rules. Statistics cited from NYU Stern (Damodaran's Margins by Sector dataset) represent industry aggregates at the time of publication; specific situations may differ.
The calculator processes your data locally in your browser - cost, markup, selling price, and profit values are not transmitted to our servers. Any saved results stay on your device.
