How to calculate margin and markup
Enter revenue and cost per unit.
1
Enter revenue
Use the selling price before tax.
2
Enter cost
Use the direct cost of the item or service.
3
Compare margin and markup
Use margin for profitability and markup for pricing from cost.
What does this tool do?
Margin and markup are related but not the same. Margin compares profit with revenue; markup compares profit with cost. This calculator shows both so a pricing decision is not based on the wrong percentage.
The Formula
Profit = Revenue − Cost; Margin = Profit ÷ Revenue; Markup = Profit ÷ CostFrequently Asked Questions
What is a good profit margin?
It varies widely by industry. Compare with your sector and include overheads, not just product cost, when assessing net margin.
Why is a 100% markup a 50% margin?
If cost is 50 and revenue is 100, profit is 50. That is 100% of cost but 50% of revenue.