Markup Calculator

What is markup, and what does the percentage measure?

Markup is the amount added to a cost to produce a selling price. The markup percentage measures that addition against the cost. If an item costs $100 and you sell it for $125, you have added $25: a 25% markup. The result describes your chosen cost base, so name what the $100 includes before treating the difference as profit.

For a purchased product, that base might include the supplier price and inbound freight. For a service, it might include direct labor and an outside specialist. A $25 difference above those costs still has to fund anything you left out. Name the included costs alongside the markup so the addition can be read in context.

How do you calculate markup and selling price?

To find a selling price, multiply cost by one plus the markup expressed as a decimal: selling price = cost × (1 + markup ÷ 100). A 30% markup on $80 is $80 × 1.30 = $104. The addition is $24. Enter a whole percentage such as 30 in the percentage field; the calculator handles the decimal conversion.

To find the markup in an agreed price, subtract cost from price, divide the difference by cost, then multiply by 100. With a $150 price and a $120 cost, the calculation is ($150 − $120) ÷ $120 × 100 = 25%. Price and cost must describe the same item and quantity. Use matching quantities when comparing the two amounts.

Choose the calculation that matches the figures you have. Cost and markup give a planned selling price; cost and selling price give the markup already included in an agreed price. Expand the calculation to see the cost base, percentage relationship and final amount, then copy the result with its units clearly identified.

To add 35% to a $200 cost, calculate $200 × 1.35 = $270. The addition is $70; the matching margin is $70 ÷ $270 × 100 = 25.93%. The multiplier includes the original cost as well as the addition. Multiplying by 0.35 alone gives only the addition. This distinction is useful when a supplier describes a price as “cost plus 35%.”

What is the difference between markup and margin?

Markup divides the difference by cost. Margin divides the same difference by selling price. At a cost of $120 and a selling price of $150, the $30 difference is 25% of cost but 20% of selling price. The profit amount is unchanged; only the denominator changes.

This matters when a buyer or partner asks for a margin. A markup and a margin use different bases. An $80 cost with 20% markup sells for $96 and leaves $16, which is 16.67% of revenue. A 20% margin requires a $100 price. A spreadsheet column labeled only “profit %” can hide this distinction, so label the percentage as markup or margin wherever you copy it.

The margin displayed here uses the same selected cost base as the markup. Label it with the included costs when comparing it with a business-wide result. For revenue-and-cost analysis, discounts and a target margin, use the profit margin calculator.

How do you convert markup to margin, or margin to markup?

Use decimal rates in the formulas. Margin = markup ÷ (1 + markup). With 50% markup, 0.50 ÷ 1.50 gives a 33.33% margin. To go the other way, markup = margin ÷ (1 − margin). A 40% margin requires 0.40 ÷ 0.60, or 66.67% markup.

Percentage conversion works without a cost. Add a cost to see the corresponding money amounts. With a $60 cost and an exact 40% margin, the matching markup is 66.666666…% and the price is $100. Using a displayed 66.67% as a new input changes the exact calculation slightly. Keep the full conversion when comparing percentages, then round money only at the final step.

A target margin of 100% has no finite positive selling price when cost is positive. The remaining share of revenue available to pay the cost would be zero. The tool stops that input instead of displaying an infinite price. For an invalid target, change the percentage to a value below 100 before using the result. A blank optional cost permits a percentage-only conversion; it is different from a zero cost entered for an item.

What do common markup percentages look like in dollars?

The following examples all use a $100 cost. The rows show how each percentage changes the addition and matching margin.

For a different cost, the dollar addition changes while the percentage relationship stays the same. A 25% markup on $400 adds $100 and produces a $500 price, again with 20% margin. Multiplying several units by a rounded unit price can create a different total from rounding the combined calculation once. Use the price and quantity that will actually appear on your quote.

How do you work backward from selling price to cost?

If you know the selling price and the markup used, cost = selling price ÷ (1 + markup ÷ 100). A $270 price that includes 35% markup has a $200 cost: $270 ÷ 1.35 = $200. The addition is $70. Subtracting 35% of the selling price would remove $94.50 and produce $175.50, which uses the wrong denominator.

Use this hand calculation when cost is missing. The calculator’s selling-price option takes both cost and price to find markup. Once you have the $200 cost, enter it with the $270 price to confirm the 35% markup. Keep the supplier invoice or costing notes beside the figures to trace the recovered base back to its inputs.

This reverse relationship also helps read multipliers. A price of twice cost uses a multiplier of 2 and a 100% markup. A multiplier of 1.35 uses 35% markup. If a price includes separate delivery or another amount outside the marked-up base, remove that separately identified amount before applying this relationship to the item cost.

Who uses the markup calculator?

Retailers and online sellers

Use a consistent acquisition cost for the goods being sold. Record whether inbound freight and packing are included. Match the quantity sold with the quantity covered by your cost record. A changed delivery charge alters the base even when the supplier’s product price stays fixed.

Keystone pricing means selling at twice the selected cost, a 100% markup that corresponds to 50% gross margin on that base. Use the gross-margin examples and historical retail context to compare percentage definitions. A product with a lower acquisition cost may still need more handling; include that difference in the defined base before comparing its markup.

Contractors and trades

Name the materials, labor or subcontractor cost being marked up. A $240 materials purchase with 25% markup becomes $300. A $500 subcontractor charge with 20% markup becomes $600. If the supplier revises a charge, update the underlying cost before comparing the selling amount.

For labor, overhead and a complete job with several cost categories, use the pricing calculator. Keep an internal labor cost distinct from the selling rate so the markup has a clear base.

Freelancers and service businesses

Use a defined direct cost, such as outsourced editing or a specialist’s fee. Compare the same deliverable on the cost and selling sides. State the work and hours included in a subcontracted package before comparing it with an hourly cost.

Here, a markup describes the addition above an entered cost. Keep the supplier’s description with that cost so it is clear which work the addition prices. If the supplier changes what is included, reassess the base before reusing the old percentage. An unchanged percentage applied to a different scope describes a different offer.

Next step: turn your selling price into a quote

Once the marked-up price is ready to offer, add a customer-facing description and quantity, then choose Turn into a quote. After free registration, the new quote carries in the calculated selling price and quantity as a line item. Review the description and work included in the quote editor.

Choose Or make it without an account to open the free quote generator. Add the selling amount and customer details there. Keep purchase costs and the markup calculation in your own pricing notes; the quote explains the goods or work offered at the selling price.