About the Markup vs Margin Calculator
Margin and markup describe the same profit from different angles. A 40% margin is not the same as a 40% markup.
Formula or method
Profit = selling price − unit cost. Margin = profit ÷ selling price × 100. Markup = profit ÷ unit cost × 100. Target price for target margin = cost ÷ (1 − target margin).
Worked example
At a cost of 60 and a selling price of 100, profit is 40, margin is 40%, and markup is about 66.67%. A 40% target margin on a cost of 60 implies a price of 100.
How to use the tool
Start with the example values above, then replace each input with your own figures. The results update immediately. Review the units, denominators, and assumptions before using any number in an important decision.
Assumptions and limitations
Margin cannot be calculated for a selling price of zero, and markup is undefined for a cost of zero. Treat overhead or transaction charges consistently when comparing products.
Frequently asked questions
Which should I use for product pricing?
Target margin is useful for revenue-based profitability goals; markup is useful when building prices upward from cost. Use one consistently.
Privacy and support
Your inputs are processed locally in your browser. ToolMosaic does not upload or store the values you enter in this tool. Our tools are free, and we appreciate your support.