How it works
Markup adds a percentage of cost to set a selling price. Margin describes the share of the final selling price left as profit.
The formula
Keep currency, units and time periods consistent. Percentage inputs use percentage points (enter 5 for 5%). Results are rounded only for display; tiny nonzero values may use scientific notation. Undefined ratios are shown as unavailable.
Cost: $40.00; Markup: 50%; Selling price: $60.00; Profit: $20.00; Equivalent margin: 33.33%; Price for 40% margin: $66.67; Markup required for 40% margin: 66.67%.
Calculation method
A 50% markup on 40 produces a price of 60, leaving one third of revenue as profit. The percentage bases differ even though the profit amount is the same.
Interpretation
Target-margin mode reverses the relationship. Storefront rounding goes upward to preserve the requested price floor, and the reported margin is recalculated from the rounded price.
Limitations
Quantity multiplies unit profit without adding volume discounts or fixed overhead. Include all relevant unit costs before using the result.
Method and reference sources
Method and content checked 2026-09-20. These sources provide background, not endorsement or professional certification. The formula and limitations above define this calculator.
- SBA — Break-even pointContribution, variable costs and fixed-cost break-even context; tool-specific extensions are explained above.
Frequently asked questions
Why does a 50% markup give a margin below 50%?
A $40 cost plus 50% markup produces a $60 selling price. The $20 profit is one-third of revenue, giving a 33.33% margin.
What is a worked example for Markup?
Cost: $40.00; Markup: 50%; Selling price: $60.00; Profit: $20.00; Equivalent margin: 33.33%; Price for 40% margin: $66.67; Markup required for 40% margin: 66.67%.