How the calculation works
Profit is the selling price minus the cost. Margin and markup divide that profit by two different amounts.
Profit = selling price − cost
Margin = profit ÷ selling price
Markup = profit ÷ cost
Selling price = cost ÷ (1 − margin) = cost × (1 + markup)
Margin can never reach 100%. Markup can be any size.Worked example
Cost 60, selling price 100.
- Profit: 100 − 60 = 40.
- Margin: 40 ÷ 100 = 40%.
- Markup: 40 ÷ 60 = 66.7%.
What this calculator does not include
- VAT, discounts, shipping and payment fees. Enter amounts that already account for them.
- Overheads such as rent and staff. The result is a gross margin on the cost you enter.
- Several products at once. Calculate each product on its own.
Amounts are rounded for display only; the calculation itself is not rounded. Results are estimates for information, not financial advice. Last updated: 12 November 2026.
Frequently asked questions
What is the difference between margin and markup?
Both are profit as a percentage, but of a different base. Margin is profit divided by the selling price. Markup is profit divided by the cost. A product that costs 60 and sells for 100 has a margin of 40% and a markup of 66.7%.
Why is a 50% markup not a 50% margin?
A 50% markup on a cost of 100 gives a price of 150 and a profit of 50. That profit is one third of the price, so the margin is 33.3%. To get a 50% margin you need a markup of 100%.
How do I set a price for a target margin?
Divide the cost by 1 minus the margin. For a cost of 60 and a 40% margin, 60 ÷ 0.60 = 100. Use the "Price from margin" option and the calculator does it for you.
Is this the same as gross profit margin?
It is the same idea when you use the cost of goods as the cost. Other costs such as rent, staff and marketing are not included, so net profit margin is lower.
Should I enter prices with or without VAT?
Use prices without VAT for both cost and selling price. VAT is passed on to the tax authority and is not part of your profit.