What is the difference between margin and markup?
Margin divides profit by selling price; markup divides profit by cost. Same dollars, different denominators.
Margin Calculator
Compare cost and selling price to get both margin and markup—two related but different percentages.
Enter cost and selling price
Provide unit cost and the price you sell at.
About this calculator
How to use Margin Calculator, plus the formulas and logic behind the results.
Tool description
Margin is profit as a share of selling price. Markup is profit as a share of cost. The same dollar profit yields different percentages under each definition.
How to use
- Enter the product or service cost.
- Enter the selling (retail) price.
- Select Calculate to view margin %, markup %, and profit.
- Read the note clarifying margin versus markup.
Formulas & reference
Profit = selling price − costMargin % = profit ÷ selling price × 100Markup % = profit ÷ cost × 100
Margin vs markup
- Margin uses selling price as the base
- Markup uses cost as the base
- Markup % is always ≥ margin % when both are positive
- Pricing targets often specify “margin,” not markup
Calculation logic
Profit is selling price minus cost. Margin divides by selling price; markup divides by cost. Zero selling price or zero cost blocks the related percentage.
Margin ≠ markup. A 40% margin is not a 40% markup. Example: cost $60, price $100 → $40 profit, 40% margin, ~66.67% markup.
Margin Calculator FAQ
Common questions about the calculation and how to interpret the estimate.
Which should I use for pricing?
Many businesses set targets as margin on revenue. Confirm which definition your team or software uses.
Can margin be negative?
Yes, if selling price is below cost—the calculator still reports the loss percentages.
Why can’t cost be zero for markup?
Markup divides by cost, so a zero cost makes markup undefined.
Is gross margin the same as this margin?
This tool computes a simple gross margin from unit cost and price, before overhead taxes.
Is this financial advice?
No—educational pricing math only; not accounting or tax advice.