Free calculator
Markup and margin calculator
Enter the cost and the markup (or the margin) you want to get the selling price before VAT, the profit per unit and the difference between markup and margin. Or start from an existing price and see the markup and margin you actually have.
The calculation runs in your browser. Your numbers are not sent anywhere.
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How markup and margin are calculated
Markup is measured against cost: markup % = (price − cost) ÷ cost × 100. A product bought for 100 and sold for 130 has a 30% markup.
Margin is measured against the selling price: margin % = (price − cost) ÷ price × 100. For the same product, the profit of 30 is a 23.08% margin, because it is divided by 130, not by 100.
Why markup and margin are not the same
The mix-up starts when someone says “we work on 30%” without saying 30% of what. If you want a 30% margin but add a 30% markup to cost, the price comes out lower than planned: 130 instead of 142.86 on a cost of 100.
To convert: margin = markup ÷ (100 + markup) × 100, and markup = margin ÷ (100 − margin) × 100. A 25% markup is a 20% margin; a 100% markup is a 50% margin. Margin can never reach 100%, because that would mean a cost of zero.
How to price from a target margin
If you know the margin you want to keep, the selling price is cost ÷ (1 − margin). With a cost of 80 and a 20% margin, the price is 80 ÷ 0.8 = 100. The calculator does this in the “price, from cost and margin” mode.
The cost should include everything you pay for the product or job: purchase price, delivery, labour or installation if you bill them together. Otherwise the margin looks better than it really is.
Markup, margin and VAT in a quote
The calculator works with amounts before VAT, like most business-to-business quotes. VAT is added once the price is set, per line or on the total; use the VAT calculator for that step.
The quote the client sees shows the selling price, the quantity and any discount, never your cost, markup or margin. If you give a discount, check the margin after it: a 10% discount on a product with a 20% margin leaves you with a margin of about 11%.
Put the price into a quote
Got your price? The free quote maker turns it into a PDF or Word quote, no account needed. With an Oifers account, the quote goes to the client as a link: you see when it was opened, and the client accepts it online with a code sent by email.
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Frequently asked questions
What is the difference between markup and margin?
Markup is calculated on cost, margin on the selling price. With a cost of 100 and a price of 125, the markup is 25% and the margin is 20%.
How do I convert markup to margin?
Margin = markup ÷ (100 + markup) × 100. A 50% markup is a 33.33% margin.
What markup should I use?
There is no percentage that fits every business: it depends on your costs, your market and your competitors. The calculator shows the effect of the percentage you choose on price and profit; it does not recommend one.
Are the numbers I enter saved?
No. The calculation runs in your browser; the numbers are not sent anywhere and are gone when you close the page.
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