How does the Markup Calculator work?
Markup measures profit relative to cost. The calculator subtracts cost from selling price, then divides that profit by cost. It also shows the corresponding selling-price margin so you can see why markup and margin produce different percentages.
For a margin-first view, open the Profit Margin Calculator.
How can markup help with pricing decisions?
Markup can be a useful starting point when a business sets prices from acquisition or production cost. It does not by itself prove that a price will cover fixed overhead, labor, marketing or other expenses. The Cost Per Unit Calculator can help build a fuller unit-cost estimate before you set a markup.
What is the difference between markup and margin?
A $40 cost and $60 selling price creates $20 profit. Markup is 50% because $20 is half of the $40 cost. Margin is 33.33% because $20 is one-third of the $60 selling price. This distinction matters when comparing pricing targets.
If you need to know how many units must sell at a chosen price, use the Break-Even Calculator.
What should you check beyond markup?
Pricing decisions can also depend on sales tax, discounts, payment fees, returns, shipping and demand. Use the Sales Tax Calculator when tax must be added to the customer-facing price, and verify actual tax obligations with the relevant state or local authority.
Frequently asked questions about Markup
Markup is the amount above cost expressed as a percentage of cost.
Markup percentage equals selling price minus cost, divided by cost, multiplied by 100.
No. A 50% markup corresponds to a 33.33% margin when cost is the markup base.
Yes. If selling price is below cost, the markup and profit are negative.
Yes, if you can define a comparable service cost and selling price.
Usually pricing analysis is performed before sales tax, but your workflow may differ. Keep the cost and selling price basis consistent.
Include overhead when you want markup to reflect that cost. Use a consistent costing method for decisions and accounting.
No. Sales volume, overhead, returns, discounts and other costs can reduce overall profitability.
Sources and methodology
The calculator uses the formulas described on this page and the values you enter. The sources below provide authoritative U.S. context for business planning, tax, recordkeeping or financial-statement concepts.