KaroDesk

Margin & Markup Calculator

Enter a cost price and selling price to see your profit, margin and markup side by side. Then use target margin pricing to find the exact selling price you should quote to hit the margin your business needs.

Handy for shop owners setting shelf prices, traders negotiating bulk rates and consultants who price on value rather than hours.

Share this toolWhatsApp

Margin & markup

₹
₹

Margin result

Profit
₹250.00
Margin
33.33%
Markup
50%
Margin divides profit by the selling price. Markup divides the same profit by the cost price, so markup is always the larger number.

Target margin pricing

Know the margin you need? We work backwards to the selling price you should quote.

%

A 100% margin is impossible — margin is always less than 100%.

Required selling price

Cost price
₹500.00
Target margin
30%
Profit at this price
₹214.29
Sell at
₹714.29
Selling price = Cost ÷ (1 − target margin ÷ 100)

Formula

Profit = Selling price − Cost price

Margin % = Profit ÷ Selling price × 100

Markup % = Profit ÷ Cost price × 100

Selling price for a target margin = Cost ÷ (1 − Target margin ÷ 100)

Worked example

Cost ₹500, selling price ₹750:

  • Profit: ₹250.00
  • Margin: 33.33% (250 ÷ 750)
  • Markup: 50% (250 ÷ 500)

Target margin of 30% on a ₹500 cost:

  • Required selling price: ₹714.29
  • Profit at that price: ₹214.29

How to use this calculator

  1. 1Enter the cost price and the selling price, both excluding GST.
  2. 2Read the gross margin percentage measured against revenue.
  3. 3Compare it with the markup figure so you know which number you are quoting.

When businesses use it

  • Setting a minimum margin rule for your sales team before they discount.
  • Reporting product-wise margin to a lender or investor who asked for gross margin.
  • Checking that a marketplace's commission still leaves you an acceptable margin.

Margin versus markup, and why the confusion costs money

Margin and markup describe the same rupee profit against two different bases. Margin divides profit by the selling price and answers the question a lender or investor asks: how much of every rupee of sales do you keep? Markup divides the same profit by the cost price and answers the trader's question: how much did I add on top of what I paid?

Because the denominators differ, the two numbers never match. A 50% markup is a 33.3% margin, a 100% markup is a 50% margin, and a 25% markup is only a 20% margin. Businesses that add 25% to cost while believing they are earning a 25% margin quietly lose five percentage points on every sale, which is often the entire net profit of a trading business.

Margin also has a ceiling: it can approach 100% but never reach it, because profit can never exceed the selling price. Markup has no ceiling at all. Whenever someone quotes a percentage above 100%, they are almost certainly talking about markup.

Pricing habits that protect margin

  • Work backwards from a target margin instead of adding a habitual percentage to cost.
  • Use cost excluding GST when the input credit is available to you.
  • Include inward freight and wastage in cost before computing margin.
  • Model the margin left after a discount before you approve a scheme.

Margin vs markup, explained simply

Margin answers "how much of the money I collect do I keep?" It is the number to use when comparing profitability across products or reporting to a lender.

Markup answers "how much do I add on top of what I paid?" It is the number to use when pricing stock up from a purchase invoice.

A 50% markup is only a 33.33% margin. Once you have your selling price, check the tax on it with the GST calculator or test a whole order with the profit calculator.

Learn the maths behind it

  • How to calculate profit margin

    Margin % = (Selling price − Cost) ÷ Selling price × 100 — always measured against revenue, not cost.

  • Markup vs margin

    Markup is calculated on cost; margin on the selling price. The same rupee profit gives two different percentages.

Was this tool useful?

Related tools

Markup Calculator

Add a markup percentage on cost price to get your selling price and profit.

Use tool

Selling Price Calculator

Set a selling price from cost price using a target margin or markup percentage.

Use tool
Popular

Profit Calculator

Work out revenue, total cost, profit, margin and markup for any order quantity.

Use tool

Frequently Asked Questions

Need to create an invoice?

Calculate GST instantly, then create a professional invoice in seconds.

Create Free Invoice

Calculations happen instantly in your browser. Your calculator inputs aren't sent to our servers. KaroDesk provides calculations and information for general informational purposes. Results should be verified against applicable laws, official notifications, employer policies, lender terms, or professional advice where appropriate. Read our full disclaimer.