Business
Profit margin & markup calculator
Enter cost (COGS) and revenue (selling price). The calculator returns dollar profit, margin % (profit ÷ revenue), and markup % (profit ÷ cost). These two percentages are NOT the same — see the FAQ.
Margin vs markup — easy to confuse
Margin = profit ÷ revenue. Always < 100%. Tells you what fraction of each sale is profit.
Markup = profit ÷ cost. Can exceed 100%. Tells you how much you raised the price above cost.
A 50% markup = a 33.3% margin. A 100% markup (price = 2× cost) = a 50% margin.
Formula
Margin and markup are constantly confused in retail and SaaS pricing discussions. They use the same dollar profit but divide by different bases:
• **Margin** = profit ÷ revenue. Tells you 'what % of each dollar of sales is profit'. Always less than 100%. The metric investors and finance teams use.
• **Markup** = profit ÷ cost. Tells you 'how much did I raise the price above cost'. Can exceed 100%. The metric retailers use when setting prices from a cost base.
A 50% markup gives 33.3% margin. A 100% markup (price = 2× cost) gives 50% margin. A 200% markup gives 66.7% margin. They asymptote — markup can grow infinitely but margin caps at 100%.
Examples
- 01Cost $80, sells for $100→ Profit $20 · Margin 20% · Markup 25%
- 02Cost $50, sells for $150→ Profit $100 · Margin 66.67% · Markup 200%
- 03Cost $10, sells for $40 (luxury markup)→ Profit $30 · Margin 75% · Markup 300%
FAQ
- Markup if you start from cost and need to set a price (cost × (1 + markup) = price). Margin if you have a price target and want to know if it's profitable enough (revenue × margin = profit). Use markup for tactics, margin for strategy.
References
Disclaimer: This calculator is for informational and educational use only. It is not professional financial advice. For decisions with real consequences, consult a qualified professional. See our terms of use for details.