Margin Calculator
Cost, price, margin and markup โ any two in, the confusion settled.
About this calculator
Four boxes โ cost, selling price, margin %, markup % โ and typing in any one updates the others, with profit per unit shown. Built specifically to end the margin-vs-markup confusion that misprices real products every day.
The distinction, and the formula everyone forgets
Margin is profit as a share of the PRICE; markup is profit as a share of the COST. Same profit, different denominators,forever different numbers: buy at $60, sell at $90, and you have 50% markup but only 33% margin. The confusion costs money in one specific way โ a shop wanting 50% margins that applies 50% markups is undershooting every price. The formula this page exists to hand you: price = cost รท (1 โ margin), so a $60 cost at 50% margin sells for $120, not $90. Anchors worth memorising: 50% margin = 100% markup = doubling cost (keystone pricing, the retail default); markup is always the larger number; margins can approach but never reach 100%. VAT sits on top of all this โ its calculator handles that layer, and the invoice guide takes it from here.
Frequently asked questions
What's the difference between margin and markup?
Margin divides profit by the selling price; markup divides it by the cost. Buy $60 sell $90: markup 50%, margin 33%. Mixing them up systematically underprices.
How do I price for a target margin?
Divide cost by (1 โ margin as a decimal): $60 cost at 40% margin โ 60 รท 0.6 = $100. Adding 40% to cost instead gives $84 โ and only a 28.6% margin.
What is keystone pricing?
Doubling the cost โ 100% markup, 50% margin โ the traditional retail default. Whether it fits depends on your overheads and volume.
Can margin be more than 100%?
No โ margin is profit รท price, and profit can't exceed the price itself. Markup can be any size: a $1 item sold for $5 has 400% markup but 80% margin.