Markup vs Margin Calculator — Convert Between Markup & Margin
Markup is the percentage added to cost. Margin is the percentage of selling price that is profit.
Markup vs Margin — What's the Difference?
Markup and margin both measure profit, but from different starting points — and confusing them is one of the most common pricing mistakes in small business.
Markup is profit as a percentage of cost. If something costs £100 and you sell it for £150, your markup is 50% — you added 50% on top of your cost.
Margin is profit as a percentage of selling price. That same £150 sale has a margin of 33.3% — one-third of the price you received is profit.
The same transaction always has a higher markup number than margin number. This is the main source of confusion. A 50% markup gives you a 33.3% margin. A 50% margin requires a 100% markup. If someone says "we make 50%" it matters enormously which one they mean.
Quick Reference Table
| Markup % | Margin % |
|---|---|
| 25% | 20.0% |
| 50% | 33.3% |
| 75% | 42.9% |
| 100% | 50.0% |
| 150% | 60.0% |
| 200% | 66.7% |
Frequently Asked Questions
What is markup?
Markup is the percentage you add to your cost price to reach your selling price. If a product costs you £40 and you sell it for £60, your markup is 50% because the £20 profit is 50% of your £40 cost.
What is margin?
Margin (or profit margin) is the percentage of your selling price that is profit. Using the same example, selling at £60 with a £20 profit gives you a margin of 33.3%, because £20 is one-third of £60.
Why is markup always higher than margin?
Because markup is calculated against the smaller number (cost) while margin is calculated against the larger number (selling price). The same profit amount divided by a smaller base gives a larger percentage.
Which should I use for pricing?
Markup is more intuitive for setting prices — you decide how much to add on top of your cost. Margin is more useful for analysing business performance — it tells you what proportion of your revenue is profit. Many businesses use markup for pricing and margin for reporting.
What markup do I need for a 30% margin?
A 30% margin requires a 42.9% markup. Use the calculator above to convert between any markup and margin values.