Profit Margin vs Markup Calculator
Enter your cost and either margin or markup — we’ll calculate the other instantly.
Profit Margin vs Markup — What’s the Difference?
Both margin and markup measure profitability, but they use different bases. Margin is calculated on revenue (selling price), while markup is calculated on cost. This makes them very different numbers for the same transaction — and confusing them can seriously hurt your pricing strategy.
The Formulas
Profit Margin = (Price − Cost) ÷ Price × 100
Markup = (Price − Cost) ÷ Cost × 100
Quick Reference Table
| Cost | Margin % | Markup % | Price |
|---|---|---|---|
| $100 | 10% | 11.11% | $111.11 |
| $100 | 20% | 25% | $125.00 |
| $100 | 30% | 42.86% | $142.86 |
| $100 | 40% | 66.67% | $166.67 |
| $100 | 50% | 100% | $200.00 |
Which Should You Use?
Use margin when talking to investors, accountants, and finance teams — it aligns with income statements. Use markup when setting prices from cost in retail or manufacturing. Both are important, but never mix them up when communicating with others.
Frequently Asked Questions
Is a 30% margin the same as a 30% markup?
No. A 30% margin on a $100 cost gives a $142.86 price. A 30% markup on a $100 cost gives a $130 price. They are very different.
Can margin be higher than markup?
No. Markup is always higher than or equal to margin for the same transaction, because it uses cost (a smaller number) as its base.
How do I convert markup to margin?
Margin = Markup ÷ (1 + Markup). Example: 50% markup → 50 ÷ 150 = 33.33% margin.