Profit Margin & Markup Calculator — Cost, Price, Margin
Margin and markup from cost and price — plus the selling price for a target margin, and a margin ↔ markup converter, so the two are never confused again.
Margin & markup from cost and price
Selling price for a target margin
Convert margin ↔ markup
Margin and markup are not the same number
Buy something for £60 and sell it for £100 and you have made £40. That £40 can be written as a percentage in two ways. Against the selling price it is a 40% margin; against the cost it is a 66.67% markup. The money is the same — only the base differs — but the two percentages are different numbers, and quoting the wrong one is one of the most common (and most expensive) pricing mistakes, because a "60% margin" and a "60% markup" are wildly different prices.
The four calculations
| Question | Method | Example |
|---|---|---|
| Margin from cost and price | (price − cost) ÷ price × 100 | (100 − 60) ÷ 100 = 40% |
| Markup from cost and price | (price − cost) ÷ cost × 100 | (100 − 60) ÷ 60 = 66.67% |
| Price for a target margin | cost ÷ (1 − margin ÷ 100) | 60 ÷ 0.60 = £100 |
| Margin ↔ markup | margin = markup ÷ (1 + markup) | 66.67% markup = 40% margin |
Why margin can never reach 100%
A 100% margin would mean the profit equals the whole selling price, leaving nothing for the cost — which only happens if the item is free. As the target margin approaches 100% the required price climbs toward infinity, which is why the target-margin field rejects 100% rather than returning a nonsense figure.
Which one should you quote?
Margin is the number that matters for profitability, because it relates the profit to the revenue you actually book, and it is what accountants and investors mean by "gross margin". Markup is more useful operationally, when you are pricing up from what you paid. When a supplier or a colleague says "we make 60%", it is worth asking which one they mean before you build a price list on it.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit measured against the selling price; markup is the same profit measured against the cost. If something costs £60 and sells for £100 the profit is £40, so the margin is 40% (40 ÷ 100) while the markup is 66.67% (40 ÷ 60). People mix the two up constantly, which is why this page shows both at once — the profit is identical either way, only the base changes.
How do I calculate profit margin?
Subtract the cost from the selling price to get the profit, then divide the profit by the selling price and multiply by 100. A product bought for £60 and sold for £100 has a margin of (100 − 60) ÷ 100 × 100 = 40%.
How do I work out the selling price for a target margin?
Divide the cost by (1 − margin ÷ 100). For a 40% margin on a £60 cost: 60 ÷ (1 − 0.40) = £100. That is the second calculator on this page. Note you cannot have a 100% margin — the cost would have to be zero.
How do I convert markup to margin?
A 50% markup is a 33.3% margin, because a 50% markup turns a £1 cost into a £1.50 price, and £0.50 profit on a £1.50 price is a third. The rule of thumb: margin = markup ÷ (1 + markup). The converter at the bottom does it in both directions.
What is a good profit margin?
It depends entirely on the industry — grocery retail runs on thin single-digit margins while software and services often exceed 80%. The useful comparison is against your own sector and against your fixed costs, not a universal target. This calculator gives you the number; the benchmark has to come from your industry.
Is anything sent to a server?
No. Every calculation runs in your browser and nothing is uploaded.
Go deeper
Longer explanations of the problems this tool solves:
Everything runs in your browser — nothing you type is uploaded.