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Markup Calculator

Markup is the percentage you add on top of cost price. Enter your cost and markup to get the selling price, the profit per unit and the margin that markup actually delivers.

Traders and distributors usually think in markup, while accountants report margin. This tool shows both so you never confuse the two.

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Markup summary

Cost priceMarkup amount
Cost price
$1,000.00
Markup amount
$400.00
Selling price
$1,400.00
Equivalent margin
28.57%
A 40% markup is only a 28.57% margin: markup is on cost, margin is on price.

A 40% markup on $1,000.00 cost works out to a 28.57% margin. Quote whichever figure your client or contract actually asks for, since the two numbers describe the same profit differently.

Smart next steps

Formula

Selling price = Cost price × (1 + Markup% ÷ 100)

Markup% = (Selling price − Cost price) ÷ Cost price × 100

Cost price = Selling price ÷ (1 + Markup% ÷ 100)

Markup is always larger than the equivalent margin because it is measured against the smaller number (cost).

Worked example

Cost $1,000 with a 40% markup gives a selling price of $1,400 and a profit of $400, which is only a 28.57% margin.

How to use this calculator

  1. 1Enter your cost price.
  2. 2Enter either the markup percentage you apply or the selling price you charge.
  3. 3Read the resulting selling price and the margin that markup actually gives you.

When businesses use it

  • Applying a standard markup across a new stock category.
  • Converting a supplier's suggested markup into the shelf price you will print.
  • Explaining to a partner why a 50% markup is not a 50% margin.

Setting a markup that survives discounts

Markup is the percentage a business adds to its landed cost to arrive at a selling price. It is the natural unit for anyone who buys to resell, because the cost is known first and the price is derived from it. Distributors typically work on 10–25%, retail hard goods on 40–60%, and services or specialty items far higher where the value is not comparable across sellers.

The number that matters is not the markup you set but the markup that survives. Trade promotions, early-payment discounts, seasonal sales and end-of-season clearance all cut into it, so a line priced at a 40% markup and sold at 15% off is really running near 19%. Building the expected discount into the markup at the start is the difference between planned promotions and accidental losses.

Landed cost, not invoice cost, should be the base. Inbound freight, import duty, packaging, breakage and any purchase tax you cannot reclaim are part of what the item actually cost you, and leaving them out makes the markup look healthier than the bank balance suggests.

Common markup errors

  • Applying markup to the pre-freight invoice cost rather than landed cost.
  • Using the same markup on fast and slow-moving stock.
  • Assuming a 30% markup leaves a 30% margin after discounting.
  • Ignoring the interest cost of stock that sits for months.

Cost-to-price examples

An item that costs $40, at four common markups:

MarkupSelling priceProfitMargin
25%$50.00$10.0020%
50%$60.00$20.0033.33%
100%$80.00$40.0050%
150%$100.00$60.0060%

A 100% markup (doubling the cost) is often called keystone pricing. It gives a 50% margin before discounts, fees and returns take their share.

Reverse markup: finding cost or markup from a price

Cost from price and markup. Divide the price by one plus the markup. A $140 price at a 40% markup means a $140 ÷ 1.40 = $100 cost.

Markup from two prices. Subtract cost from price and divide by cost. Buying at $80 and selling at $120 is ($120 − $80) ÷ $80 = a 50% markup.

Markup vs margin. The same $40 profit on that $120 sale is a 50% markup but a 33.33% margin. If a supplier, client or contract gives you a percentage, check which one it means. The markup vs margin guide covers the conversion, and the margin calculator works a price out from a target margin instead.

Learn the maths behind it

  • Markup vs margin

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

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Frequently Asked Questions

No. A 50% markup on a $100 cost gives $150 and a 33.33% margin. To reach a 50% margin you need a 100% markup.

Enough to cover overheads, discounts, returns and payment fees, plus your target profit. Check the break-even calculator for the minimum volume your markup has to support.

Apply markup to the cost excluding any tax you can reclaim, then add sales tax, VAT or GST on the selling price where it applies.

Divide the price by one plus the markup. A $140 price with a 40% markup came from a $140 ÷ 1.40 = $100 cost.

No. A high markup with low turnover can earn less annually than a modest markup on stock that rotates every few weeks.

Yes. Set the selling price before tax, then add sales tax, VAT or GST on top of that price where it applies.

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