Markup and Profit Margin Calculator

Markup is the percentage added to cost to determine selling price (Profit ÷ Cost × 100), while profit margin is the percentage of revenue that is profit (Profit ÷ Revenue × 100). Markup shows how much you add to cost, margin shows what percentage of the final price is profit.

To calculate markup percentage, subtract the cost from the selling price to get profit, then divide profit by cost and multiply by 100. Formula: Markup % = (Selling Price - Cost) ÷ Cost × 100.

Profit margin is calculated by dividing profit by revenue (selling price) and multiplying by 100. Formula: Margin % = (Selling Price - Cost) ÷ Selling Price × 100. This shows what percentage of your revenue is actual profit.

Contractors typically use markup percentages between 10-50% depending on the industry and overhead costs. Construction contractors often use 20-35% markup, while specialized trades may use higher markups to account for expertise and lower volume.

Yes, you can convert between markup and margin using formulas. To convert markup to margin: Margin % = Markup % ÷ (100 + Markup %) × 100. To convert margin to markup: Markup % = Margin % ÷ (100 - Margin %) × 100.

To find selling price from cost and desired markup percentage, multiply the cost by (1 + markup percentage as decimal). For example, if cost is $100 and you want 30% markup: Selling Price = $100 × (1 + 0.30) = $130.

The basic relationship is: Revenue (Selling Price) = Cost + Profit. Revenue is the total amount received from sales, cost is what you spent to produce the item, and profit is the difference between revenue and cost.

Understanding markup and margin helps you price products correctly to cover costs and generate desired profit. It ensures business sustainability, helps with competitive pricing, and allows you to make informed decisions about product profitability and business growth.