Pricing & Profit Tools

Margin vs Markup Calculator

Understand and convert between Profit Margin and Markup percentage instantly.

Converter

%
Equivalent Markup33.33%
Formula Guide:
• Margin = (Profit / Revenue) × 100
• Markup = (Profit / Cost) × 100

Quick Conversion Table

Margin %Markup %
10% margin11.11% markup
15% margin17.65% markup
20% margin25.00% markup
25% margin33.33% markup
30% margin42.86% markup
40% margin66.67% markup
50% margin100.00% markup
60% margin150.00% markup
75% margin300.00% markup

Margin vs Markup Calculator: Understand the Difference Side by Side

Enter your cost and selling price to see both your gross margin and markup percentage in one view.

What Is the Difference Between Margin and Markup?

Margin and markup both measure profitability, but they use different bases. Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost price.

For the same transaction, the margin is always lower than the markup. Confusing the two is one of the most common pricing mistakes in business.

Margin vs Markup: An Example

A product costs 600 rupees and sells for 1000 rupees. The profit is 400 rupees. Margin equals 400 divided by 1000, which is 40%. Markup equals 400 divided by 600, which is approximately 66.7%.

Both describe the same 400 rupees of profit but from different perspectives. This calculator shows both numbers at once so you can understand your pricing fully.

Why Does the Difference Matter?

If you set a target margin but accidentally use the markup formula, you will underprice your products and earn less profit than intended. The reverse error leads to overpricing and lost sales.

Business owners, sales teams, and accountants need to be clear on which metric they are using at all times.

When to Use Margin and When to Use Markup

Use margin when comparing profitability to revenue, when setting sales targets, or when reporting to investors and lenders. Margin is the standard profitability metric in financial reporting.

Use markup when setting prices based on cost, when communicating pricing policy to sales teams, or when your pricing system starts from cost and adds a fixed percentage.

Converting Between Margin and Markup

To convert markup to margin: margin equals markup divided by (1 plus markup as a decimal). To convert margin to markup: markup equals margin divided by (1 minus margin as a decimal).

This calculator does these conversions for you automatically from your cost and price inputs.

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Frequently Asked Questions

Common questions about Margin vs Markup Calculator: Understand the Difference Side by Side on Tez Invoice.

What is the difference between margin and markup?

Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost price. For the same transaction, margin is always lower than markup.

How do I calculate gross margin?

Gross margin equals (selling price minus cost) divided by selling price, times 100.

How do I calculate markup?

Markup equals (selling price minus cost) divided by cost, times 100.

Is this calculator free?

Yes. Free with no sign up.

Why is my margin lower than my markup?

Because margin uses selling price as the base and markup uses cost price. The cost is always less than the selling price, so the markup percentage is always higher.

How do I convert markup to margin?

Margin equals markup divided by (1 plus markup as a decimal). For 50% markup: margin equals 0.5 divided by 1.5, which is 33.3%.

Does this work on mobile?

Yes. Fully responsive.

Is my data stored?

No. In-browser only.

Should I use margin or markup for pricing?

Both are useful. Use markup to price from cost. Use margin to measure profitability against revenue.

Where can I create invoices?

Use the free Invoice Generator on Tez Invoice.