Margin vs Markup Calculator
Understand and convert between Profit Margin and Markup percentage instantly.
Converter
• Margin = (Profit / Revenue) × 100
• Markup = (Profit / Cost) × 100
Understand and convert between Profit Margin and Markup percentage instantly.
Enter your cost and selling price to see both your gross margin and markup percentage in one view.
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.
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.
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.
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.
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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Common questions about Margin vs Markup Calculator: Understand the Difference Side by Side on Tez Invoice.
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.
Gross margin equals (selling price minus cost) divided by selling price, times 100.
Markup equals (selling price minus cost) divided by cost, times 100.
Yes. Free with no sign up.
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.
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%.
Yes. Fully responsive.
No. In-browser only.
Both are useful. Use markup to price from cost. Use margin to measure profitability against revenue.
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