Markup calculator
Set prices with confidence. Start from your cost, choose what you know, and the selling price, markup, profit and margin appear as you type.
Markup calculator: three modes, each starting from the cost of one item or one hour. Price from markup: enter a markup percentage to see the selling price, the profit on each sale and the profit margin. Markup from price: enter the selling price to see the markup, profit and margin. Price from margin: enter the profit margin you want to see the price that reaches it and the markup it takes. Everything is worked out in the browser.
The Coavon team · · 9 min read
Markup is the amount you add to a product’s cost to get its selling price, written as a percentage of the cost. To calculate it, subtract the cost from the price, divide by the cost and multiply by 100. Something that costs you $40 and sells for $60 has a markup of ($60 − $40) ÷ $40 × 100 = 50%.
The calculator above works it out in any direction: from a markup to a price, from a price back to the markup, or from the profit margin you want to the price you need. Below: how to use it, the markup formula, the difference between markup and margin (and a table to convert one to the other), worked examples for products and services, and the pricing mistakes markup can hide.
How to use the markup calculator
Every mode starts from the cost: everything it takes to make, buy or deliver one item, or to provide one hour of work. Then pick what you already know.
- Price from markup: you know the markup you want to add. Enter it to see the selling price, the profit on each sale and the profit margin that markup gives you.
- Markup from price: you already have a price, your own or a competitor’s. Enter it to see the markup and margin it represents.
- Price from margin: you know the margin you need to cover overheads and make a profit. Enter it to see the price that reaches it, and the markup that takes.
Each mode shows the profit margin as well as the markup, because the two are easy to confuse and the difference matters, as the next sections show.
The markup formula
| To find | Formula |
|---|---|
| Markup % | (Selling price − Cost) ÷ Cost × 100 |
| Selling price from a markup | Cost × (1 + Markup %) |
| Cost from a price and markup | Selling price ÷ (1 + Markup %) |
| Profit on each sale | Selling price − Cost |
How to calculate markup, step by step
- Work out the full cost of one unit. For a product: the price you paid, plus shipping in, packaging and payment fees. For a service: the cost of an hour of time plus a share of your overheads.
- Subtract the cost from the selling price. That is your profit on each sale. $60 − $40 = $20.
- Divide the profit by the cost. $20 ÷ $40 = 0.5.
- Multiply by 100. 0.5 × 100 = 50% markup.
Going the other way is just as quick: to add a 50% markup to a $40 cost, multiply $40 by 1.5 to get a $60 selling price.
Markup vs margin
Markup and margin both describe the same profit, but measure it against different things. Markup compares the profit with the cost. Margin compares it with the selling price. Because the price is always bigger than the cost when you make a profit, the margin is always the smaller number.
| Markup | Profit margin | |
|---|---|---|
| Measures profit as a share of | The cost | The selling price |
| Formula | (Price − Cost) ÷ Cost × 100 | (Price − Cost) ÷ Price × 100 |
| $40 cost, $60 price | 50% | 33.33% |
| Mostly used for | Setting a price from a cost | Judging how profitable sales are |
| Can it exceed 100%? | Yes | No |
To convert one to the other: margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin), with both written as decimals. A 50% markup is 0.5 ÷ 1.5 = 33.33% margin; a 40% margin is 0.4 ÷ 0.6 = 66.67% markup.
Markup to margin conversion table
| Markup | Profit margin |
|---|---|
| 10% | 9.09% |
| 20% | 16.67% |
| 25% | 20% |
| 30% | 23.08% |
| 33.33% | 25% |
| 40% | 28.57% |
| 50% | 33.33% |
| 60% | 37.5% |
| 75% | 42.86% |
| 100% | 50% |
| 150% | 60% |
| 200% | 66.67% |
A 100% markup, doubling the cost, is often called keystone pricing in retail. It gives a 50% margin.
Markup examples
A product for resale
A shop buys a lamp for $40, including shipping. With a 50% markup it sells for $60, making $20 on each one: a 33.33% margin.
Pricing to reach a margin
The same shop wants a 40% margin on everything, to cover rent and wages. A $40 lamp needs to sell for $40 ÷ (1 − 0.40) = $66.67, which is a 66.67% markup. Use the calculator’s Price from margin mode to do this for every product.
Services and hourly rates
Markup works for time as well as products. Say an hour of your time costs you $35 once software, insurance and the admin hours you cannot bill are spread across the hours you can. A 60% markup gives an hourly rate of $56, keeping $21 an hour: a 37.5% margin. Enter $35 as the cost in the calculator and try different markups to see the rate each gives.
Materials on a job
A contractor buys $2,000 of materials for a job and adds a 15% markup when billing the client: $2,000 × 1.15 = $2,300. The $300 covers ordering, collecting and the risk of mistakes, and is a 13.04% margin on the materials.
Common markup mistakes
- Using a markup when you meant a margin. Want a 30% margin on something that costs $100? Adding a 30% markup gives $130 and only a 23.08% margin. The right price is $100 ÷ 0.7 = $142.86, a 42.86% markup.
- Leaving costs out. Shipping in, packaging, card fees, returns and the time it takes to sell all belong in the cost. Missing them makes a healthy-looking markup thin in practice.
- Forgetting discounts. A $60 price on a $40 cost is a 50% markup, but a 20% sale price of $48 leaves $8 of profit: a 20% markup and a 16.67% margin. Set your markup high enough to survive the discounts you expect to give.
- Pricing only from cost. Markup tells you what covers your costs, not what customers will pay. Check the result against competitors and the value you deliver; some products can carry far more, others cannot carry what you would like.
- One markup for everything. Products that sell slowly, need more support or are returned more often usually need a higher markup than steady sellers.
How to calculate markup in Excel or Google Sheets
With the cost in cell A2 and the selling price in B2:
- Markup:
=(B2-A2)/A2, formatted as a percentage. - Profit margin:
=(B2-A2)/B2, formatted as a percentage. - Price from a markup in C2 (as a percentage):
=A2*(1+C2). - Price from a margin in D2 (as a percentage):
=A2/(1-D2).
Know your real costs before you mark them up
A markup is only as good as the cost it starts from, and for service businesses the biggest cost is time. Coavon includes time tracking on every plan, so the hours a job really took are logged against its tasks in Flow rather than estimated, and your quotes can start from real numbers. To see whether the projects you price are paying off once they are done, try our ROI calculator.
How do you calculate markup?
Subtract the cost from the selling price, divide by the cost and multiply by 100. A $40 item selling for $60 has a markup of ($60 − $40) ÷ $40 × 100 = 50%.
How do I add a markup to a cost?
Multiply the cost by 1 plus the markup as a decimal. A 50% markup on $40 is $40 × 1.5 = $60.
What is the difference between markup and margin?
Markup is profit as a share of the cost; margin is profit as a share of the selling price. The same $20 profit on a $40 cost and a $60 price is a 50% markup but a 33.33% margin.
How do I convert margin to markup?
Divide the margin by 1 minus the margin, using decimals. A 40% margin is 0.4 ÷ 0.6 = 0.6667, a 66.67% markup. The table above lists common values.
Is a 100% markup the same as a 100% margin?
No. A 100% markup doubles the cost and gives a 50% margin. A 100% margin is impossible, because it would mean the item cost nothing.
What markup should I use?
Work out the margin you need to cover your overheads and make a profit, then use the Price from margin mode to find the markup that reaches it. Check the price against what customers pay elsewhere before you settle on it.
Does the calculator save my numbers?
No. Everything is worked out in your browser. Nothing you enter is saved or sent anywhere.