Markup and Profit Margin Calculator

Markup and profit margin are two different ways to measure pricing performance — markup is the percentage added on top of cost, while profit margin is the percentage of the selling price that becomes profit. Enter your Cost and Selling Price into the Markup and Profit Margin Calculator to get your Markup Percentage, Profit Margin, Profit, and Revenue. Select your preferred currency and decimal places to match your reporting needs.

$

The total cost to produce or acquire the product

$

The price at which you sell the product

Results

Markup Percentage

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Profit Margin

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Profit

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Revenue

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Frequently Asked Questions

What is the difference between markup and profit margin?

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.

How do I calculate markup percentage from cost and selling price?

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.

How do I calculate profit margin percentage?

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.

What is a good markup percentage for contractors?

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.

Can I convert markup to margin or vice versa?

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.

How do I calculate selling price if I know my desired markup?

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.

What's the relationship between cost, revenue, and profit?

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.

Why is understanding markup and margin important for my business?

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.