A margin and markup calculator ties together the three numbers every seller cares about — cost, selling price and profit — and the two ways of expressing profitability as a percentage. Gross margin states profit as a share of the selling price; markup states the same profit as a share of the cost. They describe the identical dollar profit but from different angles, which is why a 20% margin and a 25% markup are the same deal. This tool works in three directions: give it a cost and a target margin and it sets the price; give it a cost and a markup and it sets the price; or give it a cost and a price and it reveals the margin, the markup and the profit. Results are currency-neutral — you type the numbers and an optional currency label — so it works for any product, service or market.
How to use this calculator
1. Choose a mode: ‘From margin’, ‘From markup’ or ‘From price’.
2. Enter the cost (your cost of goods).
3. In margin or markup mode, enter the target percentage to get the selling price, profit and the other percentage.
4. In ‘From price’ mode, enter the selling price to get the gross margin, markup and profit.
5. Optionally add a currency label (like USD) that is appended to every figure.
Results and the formula update instantly.
Formula
With cost C, price P and profit = P − C:
margin (%) = profit ÷ P × 100 (share of price)
markup (%) = profit ÷ C × 100 (share of cost)
From a target margin m: P = C ÷ (1 − m/100)
From a target markup u: P = C × (1 + u/100)
Examples: cost 80 at 20% margin → price 100, profit 20, markup 25%. Cost 80 at 25% markup → price 100, profit 20, margin 20%. Cost 80 and price 100 → margin 20%, markup 25%, profit 20.
Interpreting Results
Margin tells you how much of each sale you keep after the cost of goods, which is why it is the figure used in financial statements and when comparing businesses. Markup is the operational lever you apply to a cost to set a price. Confusing the two is a classic pricing error: applying a 20% markup when you wanted a 20% margin leaves you short, because price = cost ÷ (1 − margin) is always higher than cost × (1 + margin). Note that gross margin here ignores operating costs, overheads and taxes, so it is profitability at the product level, not the bottom line. A negative result means you are selling below cost — a loss — which the calculator flags in red.
Frequently Asked Questions
What is the difference between margin and markup? ▾
They measure the same profit against different bases. Gross margin is profit as a share of the selling price (profit ÷ price); markup is profit as a share of the cost (profit ÷ cost). Since price exceeds cost, markup is always the larger percentage. A 20% margin equals a 25% markup in dollar terms.
How do I turn a target margin into a selling price? ▾
Divide, don’t add: price = cost ÷ (1 − margin/100). An item costing 80 at a 20% margin sells for 80 ÷ 0.80 = 100, not 80 × 1.20 = 96. Adding the margin to the cost understates the price and erodes your profit.
Why can’t margin reach 100%? ▾
A 100% margin implies a cost of zero, and the price formula divides by (1 − margin/100), i.e. by zero. For any item with a real cost the margin gets close to but never reaches 100%. Markup has no such ceiling and can exceed 100%.
What does a negative margin mean? ▾
It means the selling price is below the cost, so you make a loss on the sale. The calculator shows the loss in red with a negative margin and markup — handy for catching underpriced items or the effect of fees and discounts.
Gross margin and markup here cover the product level only and ignore operating expenses, overheads, taxes and fees. Use them as a pricing guide, not as a measure of overall business profitability.