Margin and markup describe the same dollar of profit from two different directions — and because both are percentages, they get swapped constantly. The swap is never harmless: pricing “at 30%” with the wrong one changes your price.
The two formulas
Margin (%) = Profit ÷ Selling price × 100
Markup (%) = Profit ÷ Cost × 100Same numerator, different denominator. Price is always bigger than cost (when you profit), so margin is always the smaller number for the same sale.
Example: cost $60, price $100 → profit $40.
- Margin = 40 ÷ 100 = 40%
- Markup = 40 ÷ 60 = 66.7%
Converting between them
Markup = Margin ÷ (1 − Margin)
Margin = Markup ÷ (1 + Markup)| Margin | Markup |
|---|---|
| 10% | 11.1% |
| 20% | 25% |
| 25% | 33.3% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100% |
| 60% | 150% |
| 75% | 300% |
Read the 50% row twice — it is the one that catches people. A 50% margin needs a 100% markup (doubling the cost).
Pricing from each
From cost C:
- Target markup m:
Price = C × (1 + m) - Target margin g:
Price = C ÷ (1 − g)
That divide-by-(1−g) is why margin-based prices climb steeply: a $60 cost at 75% margin needs a $240 price, not $105.
The Margin & Markup Calculator computes price, profit, and both percentages from whichever target you have — including reverse from a known selling price. Worked example: Price a Product With a Target Margin.
Where each convention lives
- Markup — retail buying, distribution, cost-plus contracts (“keystone” = 100% markup).
- Margin — P&L statements, SaaS metrics, investor decks (“gross margin”).
When someone says “we price at 30%”, ask which. The difference between 30% margin and 30% markup on a $70 cost is a $100 price vs a $91 price — about 10% of revenue.
Related
- US Money Ops hub
- Discount Calculator — margins after promotional discounts
- Percentage Calculator — general percentage math