How this calculator works
Markup and margin are often confused. Markup measures profit relative to cost, while margin measures profit relative to selling price. The same product can have a high markup but a lower margin percentage.
Markup = profit ÷ cost
Margin = profit ÷ selling price
Margin = profit ÷ selling price
If you are setting prices, use margin to understand how much of the selling price becomes profit. Use markup to understand how much you add above cost.
How to use this calculator
- Enter realistic values that match your current situation.
- Press Calculate to refresh the estimate.
- Compare the main result with the supporting details in the result panel.
- Change one input at a time to see which variable affects the result most.
Planning note: Markup vs Margin Calculator gives an educational estimate. It does not include every tax rule, fee, platform policy, market condition, or personal constraint, so use it as a quick planning reference rather than a final decision.
FAQ
What is markup?
Markup is profit divided by cost.
What is margin?
Margin is profit divided by selling price.
Why are markup and margin different?
They use different denominators. Markup uses cost, while margin uses selling price.
Which is better for pricing?
Many businesses use margin because it shows how much of revenue remains as profit.
Can markup be higher than margin?
Yes. For positive profit, markup is usually higher than margin.