Updated · Built and checked by the PlinzoTools team, formulas tested against published sources
Calculate markup percentage from cost and selling price.
50.00% Markup
Markup expresses profit as a percentage of cost (not revenue) -- the pricing-side complement to profit margin, commonly used by retailers setting prices from wholesale cost.
Enter cost and selling price. Profit and markup percentage appear instantly.
Markup % = ((Selling Price - Cost) / Cost) × 100
With the default inputs, cost is 100 and selling price is 150. Profit is 50 and markup is 50 divided by 100, or 50 percent. Here are a few more scenarios.
Markup can exceed 100 percent, as in the second row, whenever profit is larger than cost. This is normal for items with a low purchase price, such as accessories or printed products. A negative markup means you are selling below cost.
The formula rearranges to selling price equals cost multiplied by one plus the markup as a decimal. If your policy is a 60 percent markup on a wholesale cost of 25, the price is 25 times 1.6, or 40. To check, enter 25 and 40 into the calculator and you should see a profit of 15 and a markup of 60 percent. This is the reason retailers use markup: it is quick to apply to a supplier invoice.
Using the same 25 cost and 40 price, profit is 15. Markup divides that profit by the cost (15 over 25, 60 percent). Margin divides it by the price (15 over 40, 37.5 percent). The same sale therefore has two different percentages. If a business tells you it has a 60 percent margin when it really means 60 percent markup, it is overstating its profitability by a wide margin. When comparing your numbers to a benchmark or an investor's target, confirm which of the two measures is being quoted. The Margin to Markup Converter linked from this page will translate between them exactly.
The markup only covers what you put in the cost box. A 50 percent markup does not mean 50 percent net profit, since rent, staff, marketing, payment fees, returns, discounts and tax all still need to be paid from the gross profit.
A good habit is to calculate markup when setting prices and margin when reviewing results, and to record which one you used. Before locking in prices for a whole product line, sanity-check a few items against your full overhead so that the markup you choose is enough to cover more than just the goods themselves.
Markup divides by cost, margin divides by price -- a 50% markup on a $100 cost item ($150 price) is actually a 33.3% margin. See the Margin to Markup Converter to convert exactly between them.
Yes. Whenever the profit is larger than the cost, markup exceeds 100 percent. For example, buying at 8 and selling at 20 gives a 150 percent markup.
Multiply the cost by one plus the markup as a decimal. A cost of 25 with a 60 percent markup gives 25 times 1.6, which is 40.
No. A 50 percent markup is a 33.3 percent margin on the sale, and both figures are before your operating expenses and tax.
Markup is profit divided by cost, so a zero cost would need division by zero. The tool asks for a non-zero cost.
Reference: Consumer Financial Protection Bureau