Markup Calculator
Markup and profit margin are two distinct measures that business owners, buyers, and accountants routinely confuse, this calculator separates them clearly so you can price products correctly and understand what you actually keep on each sale. Work forward from cost and markup, or reverse-solve the markup you need from a target price or margin, then scale to any quantity and add sales tax.
Formula
Worked example
Cost $50 with 40% markup: profit $20, selling price $70, margin 28.6%. Reverse: a fixed $70 price on a $50 cost is a 40% markup. For a 30% target margin on $50 cost, price = 50 / 0.70 = $71.43.
How Markup and Margin Differ
Markup is profit expressed as a percentage of your cost, it answers how much you added on top of what you paid. Margin is profit expressed as a percentage of the selling price, it answers how much of each dollar of revenue you retain. A 50% markup does not equal a 50% margin; the same dollar profit is divided by a different base number in each case. To convert between them: margin equals markup divided by (100 plus markup), and markup equals margin divided by (100 minus margin), each times 100. Conflating the two is one of the most common pricing errors in retail and wholesale, so this calculator always shows both side by side.
Forward and Reverse Modes
Pick what you already know. In the default mode you enter cost and markup percentage, and the calculator returns the selling price, gross profit, and margin. Switch the solve-for control to start from a target selling price, and it works backward to the markup and margin that price implies, useful when a market price is fixed and you need to know whether your cost still leaves room. A third mode starts from a target margin and tells you the exact markup and price required to hit it. Whatever you enter, the per-unit math is identical; only the unknown being solved changes.
Quantity, Sales Tax and Totals
Set a quantity to scale the per-unit figures into order totals: total cost, total revenue, and total profit across the whole batch. Turn on sales tax to add a percentage on top of the pre-tax selling price, which produces the tax amount and the final price a customer actually pays at the register. Tax is applied to the selling price, not the cost, and it does not change your profit, it is collected on behalf of the tax authority and passed through. Use the totals when quoting a job, planning a purchase order, or reconciling a sales invoice.
What Affects Your Results
Cost should reflect the fully loaded product cost, including freight, duties, and any direct handling charges, not just the invoice price, because every output is derived from it. Your markup percentage is a business decision driven by industry norms, competitive pricing, and the gross profit you need to cover overhead and reach net profitability. Gross profit produced here does not account for operating expenses, income tax, returns, or discounts, so treat it as a pricing tool rather than a profit-and-loss statement. For financial reporting, gross margin figures should reconcile to your income statement under the applicable accounting standard.
Limitations to Keep in Mind
This calculator computes gross profit only, it does not model net profit, overhead allocation, volume-based pricing tiers, or currency conversion. It assumes a fixed unit cost; businesses with variable costs or bundled products need to establish a blended cost before applying a single markup figure. Sales tax handling is a simple percentage add-on and does not model multi-jurisdiction rates, exemptions, or VAT input credits. If your cost and selling price are in different currencies, convert to one currency before entering values.
Typical markup by industry
| Industry | Typical markup | Approx. margin |
|---|---|---|
| Grocery / supermarket | 10-15% | 9-13% |
| Restaurants (food) | ~60% | ~38% |
| Clothing / apparel | 100-250% | 50-71% |
| Jewelry | 100-300% | 50-75% |
| Furniture | 40-50% | 29-33% |
| Electronics | 5-20% | 5-17% |
| Automobiles (new) | 5-15% | 5-13% |
Common gross markup ranges; actual figures vary by business, location and competition.
Frequently asked questions
Is a 30% markup the same as a 30% margin?
No. A 30% markup on a $100 cost yields a $130 selling price and a margin of roughly 23.1%, because margin divides the $30 profit by the $130 selling price rather than by the $100 cost. The higher the percentage, the larger the gap between an equivalent markup and margin figure. This calculator always reports both so you never confuse them.
How do I convert markup to margin and back?
Margin equals markup divided by (100 plus markup), times 100; so a 50% markup is 50 / 150 = 33.3% margin. Going the other way, markup equals margin divided by (100 minus margin), times 100; so a 40% margin needs a 40 / 60 = 66.7% markup. The reverse-solve modes here do this for you automatically.
How do I work backward from a selling price to the markup?
Set the solve-for control to 'selling price', enter your cost and the price you want to charge, and the calculator returns the markup and margin that price represents. Markup is (price minus cost) divided by cost, times 100. This is handy when the market sets the price and you need to confirm your cost still leaves an acceptable margin.
Does adding sales tax change my profit?
No. Sales tax is added on top of the selling price and collected from the customer on behalf of the tax authority, so it raises the final price the customer pays but is passed straight through. Your gross profit is the selling price minus cost, calculated before tax. The calculator shows the tax amount and the tax-inclusive final price separately.
What markup percentage do most retailers use?
Markup varies widely by industry. Grocery retail commonly operates on markups under 15%, while apparel and specialty goods frequently run 100% or higher and restaurants often sit near 60%. The appropriate markup for any business depends on its cost structure, competitive environment, and the gross margin needed to cover operating expenses and return a profit. See the industry table below for typical ranges.