Markup Calculator

What is markup?

Markup is the amount added to a product's cost to arrive at its selling price, shown here both as a dollar amount and as a percentage of cost. It is a pricing-side metric: businesses often set markup targets when deciding what to charge, then check the resulting profit margin separately.

Markup and margin describe the same underlying dollars — selling price minus cost — but as a percentage of two different bases, so they are not interchangeable. See the comparison below and the dedicated Profit Margin Calculator for the margin side of the same numbers.

Formula

• Markup amount = Selling price − Cost
• Markup % = Markup amount ÷ Cost × 100
• Equivalent profit margin % = Markup amount ÷ Selling price × 100

Cost and selling price must use the same currency and refer to the same unit or scope (for example, both per item, or both for one order).

Markup vs margin: why a 50% markup is not a 50% margin

Markup is calculated on cost; margin is calculated on selling price. A $100 cost marked up 50% sells for $150 — but the profit margin on that $150 sale is $50 profit ÷ $150 selling price = 33.3%, not 50%. The two figures only converge as the percentage approaches zero, and diverge more the higher the percentage climbs. Confusing the two can lead to under-pricing: a business that wants a 50% margin but sets a 50% markup instead will actually land at 33.3% margin.

How businesses use markup in pricing

Cost-plus pricing applies a target markup percentage to known cost to set a selling price quickly and consistently across many products, without needing to model demand for each one individually. Its main limitation is that a fixed markup ignores what customers are actually willing to pay and what competitors charge for comparable products, so a cost-only markup is often a starting point for pricing, not a complete pricing strategy on its own.

Worked example

Consider a product with:

• Cost = $100
• Selling price = $150

Markup amount = $150 − $100 = $50
Markup % = $50 ÷ $100 × 100 = 50%
Equivalent profit margin % = $50 ÷ $150 × 100 = 33.3%

Use the “Load example” button above to load this exact scenario into the calculator.

Selling below cost (negative markup)

If a selling price is set below cost — for clearance, loss-leader pricing, or by mistake — markup amount and markup percentage are both negative. For example, a $100 cost sold at $80 gives a markup amount of −$20 and a markup percentage of −20%. This calculator supports and displays that case without adjustment, since it is a factual outcome worth seeing clearly, not an error state.

Limitations of cost-only pricing

Markup is calculated from cost and selling price alone. It does not account for demand, competitor pricing, perceived value, sales volume, or how a price change might affect the number of units sold. This calculator is a planning tool for checking the math behind a pricing decision, not a substitute for market research, competitive analysis, or accounting, tax, or financial advice.

Related pricing calculators

For the margin side of these same numbers, see the Profit Margin Calculator. For a version of margin specifically built around revenue and cost of goods sold (COGS) at the product-line level, see the Gross Margin Calculator. For a fuller comparison with worked examples and a conversion table, see the Profit Margin vs Markup guide.