Margin & Markup Calculator
Margin and markup sound alike and differ enormously. Enter any two of cost, price, or target percentage — get the rest, both ways.
| Profit per unit | — |
| Margin (profit ÷ price) | — |
| Markup (profit ÷ cost) | — |
Margin vs markup — the difference that costs money
Margin = Profit ÷ Price · Markup = Profit ÷ Cost
Cost $40, price $65: profit $25 = 38.5% margin but 62.5% markup. Same transaction, two very different percentages — because they divide by different bases. The classic small-business error: wanting a 50% margin, applying a 50% markup, and getting only a 33% margin. On real volume that mistake is the whole profit.
Conversion table
| Markup | Equals margin |
|---|---|
| 25% | 20% |
| 50% | 33.3% |
| 100% (keystone) | 50% |
| 150% | 60% |
Pricing for a target margin
Price = Cost ÷ (1 − target margin)
For a 50% margin on a $40 cost: 40 ÷ 0.5 = $80 (not $60, which a 50% markup would give). Retail "keystone" pricing (double the cost) is a 100% markup = 50% margin — the traditional starting point before category norms adjust it. Check whether the resulting margins cover fixed costs with the break-even calculator.
Frequently asked questions
What is the difference between margin and markup?
Both measure the same dollar profit against different bases: margin divides by selling price, markup divides by cost. A $25 profit on $40 cost / $65 price is a 38.5% margin but a 62.5% markup.
How do I price for a 50% margin?
Divide cost by (1 − 0.5): a $40 cost needs an $80 price. Applying a 50% markup instead gives $60 — only a 33% margin, the most common pricing mistake.
What is keystone pricing?
Doubling the cost — a 100% markup, equal to a 50% margin. The traditional retail default, adjusted up for slow-moving goods and down for competitive categories.
Can markup exceed 100%?
Easily — jewelry, cosmetics, and software commonly run 200–1000% markups. Margin, by contrast, can never reach 100% while the product has any cost.
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Last updated: 2026-07-08