Markup vs Margin Calculator
Markup vs Margin Calculator
| Price | — CALCULATED |
|---|---|
| Profit | — CALCULATED |
| Margin Percent | — CALCULATED |
Show formula
Price = cost × (1 + markup / 100). Margin = (price − cost) / price × 100.
Read the three results together
Cost is the amount you intend to mark up. It might represent purchased parts, a subcontractor charge, or a whole job’s documented cost. Markup (%) is added to that cost, so it is not the percentage of sales you retain. The calculator produces Price, Profit, and Margin (%). Profit here means price minus the entered cost. If the cost field omits labor, travel, or allocated overhead, the displayed profit is not business net profit.
The input has a preset markup of 50%; replace it with your own intended figure. A positive markup can still leave inadequate contribution after expenses excluded from the cost field. Before using the result as a customer quote, check which items belong in cost and whether taxes or fees must be handled separately. The tool cannot decide the appropriate markup for a market or trade.
How the calculation works
price = cost × (1 + markup / 100). Then profit = price − cost and, if price is positive, margin = 100 × profit / price. Cost is the denominator of markup; price is the denominator of margin. This is why a 50% markup produces a 33.333…% margin. The calculator permits a zero cost input, but a nonpositive price leaves margin unavailable because there is no positive sales base.
Example assumptions — not benchmarks: cost $100 and markup 50%. Multiplying $100 by 1.50 produces a $150 price. Subtracting $100 leaves $50 profit. Dividing $50 by $150 and multiplying by 100 gives 33.333…% margin, displayed as 33.3%. These values show the arithmetic, not a recommended selling strategy.
Exact conversion reference
The table treats each markup as a percentage of cost. Margin is calculated as 100 × markup / (100 + markup); the fractions make the conversions exact.
| Markup on cost | Margin on price |
|---|---|
| 0% | 0% |
| 25% | 20% |
| 50% | 33⅓% |
| 75% | 42 6/7% |
| 100% | 50% |
| 150% | 60% |
| 200% | 66⅔% |
To reverse the question and find markup from a desired margin below 100%, divide the margin percentage by 100 minus that margin, then multiply by 100. That reverse conversion is explanatory; this calculator’s form takes markup as input.
Use the right basis when quoting
A target margin should not be entered directly in the Markup (%) field. For example, a desired 50% margin requires a 100% markup on cost, as the table shows. When comparing proposals, ask whether a quoted percentage refers to cost or selling price. The distinction is especially consequential when parts, labor, and overhead are combined into one cost base.
For pricing from a specified target margin, use job pricing. Check realized margin on completed work with profit margin. The overhead percentage tool and labor rate tool can help build a more complete cost basis.
Keep the cost base attached to each quote. A percentage copied from a parts-only estimate will not necessarily work on a full job that includes labor and subcontractors. Review the realized margin after completion.
Markup questions
The same dollar profit is divided by a larger base for margin: selling price rather than cost. Only if overhead is already included in the Cost amount you enter. The tool subtracts Cost from Price and adds no other expenses. The form accepts markup, not margin. Convert the desired margin to markup first, or use the job pricing calculator. The margin formula divides by Price and requires a positive denominator.Frequently asked questions
Why is margin lower than markup?
Does Profit include overhead?
Can I enter a target margin?
Why is margin unavailable for a zero price?
Last updated: September 24, 2026