Use the Margin & Markup Calculator in three steps
Enter the item cost
Use the direct cost assigned to the item.
Enter the selling price
Use the revenue received before any additional expenses.
Compare the measures
Review gross profit, margin, and markup side by side.
Margin and markup use different bases
Margin divides profit by selling price. Markup divides the same profit by cost, so the percentages are not interchangeable.
Gross profit is not net profit
This calculator subtracts item cost only. Fees, wages, rent, returns, taxes, and other operating costs still affect final profitability.
Margin & Markup Calculator FAQ
What is gross profit?＋
It is selling price minus item cost before other business expenses.
How is profit margin calculated?＋
Gross profit is divided by selling price and multiplied by 100.
How is markup calculated?＋
Gross profit is divided by item cost and multiplied by 100.
Why is a 50% markup not a 50% margin?＋
Markup uses cost as its base while margin uses the higher selling price as its base.
What happens when cost is zero?＋
Markup is undefined because it would require division by zero.
Does the result include overhead?＋
No. Include overhead in cost yourself if that matches your pricing method.