Tiny Toolkit

Markup vs Margin Calculator — Know the Difference

Convert between markup percentage and gross margin percentage, and see how each affects your selling price. Markup is calculated from cost; margin is calculated from revenue — they're often confused but mean very different things. Enter either one and this tool instantly converts to the other.

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Frequently Asked Questions

What is the difference between markup and margin?
Markup is the percentage added to cost to get the selling price (Markup = Profit ÷ Cost). Margin is the percentage of the selling price that is profit (Margin = Profit ÷ Revenue). A 50% markup equals a 33.3% margin; they always describe the same profit but from different bases.
Why do businesses confuse markup and margin?
Both are expressed as percentages of a profit over a number, so they look similar. The difference is the denominator: markup divides by cost, margin divides by revenue. Using the wrong one when pricing can lead to under-pricing and losses.
How do I convert markup to margin?
Margin = Markup ÷ (1 + Markup). For example, a 40% markup: 0.40 ÷ 1.40 = 28.6% margin. To go the other way: Markup = Margin ÷ (1 − Margin). A 28.6% margin: 0.286 ÷ 0.714 = 40% markup.

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