Markup Calculator
Price a product from cost using a target markup.
Details
Selling price
$60.00
50% markup on $40 cost
This works out the markup between a cost and a selling price, or the price to charge for a markup you want to apply.
It shows the equivalent profit margin alongside it, because those two percentages are easy to confuse and expensive to mix up.
What markup means
Markup is how much you add to what something cost you in order to arrive at a selling price. Buy for $60, sell for $100, and the $40 added is a 66.7% markup.
It is the pricing action: you start with a cost and mark it up. Profit margin is the reporting figure: you look at a completed sale and ask what share of the price was profit.
Same $40 profit, two percentages. Against the $60 cost it is 66.7%; against the $100 price it is 40%. Neither is wrong, but using one where the other belongs is the most common pricing error small businesses make.
Markup is always the larger of the two, and it has no upper limit. Margin can never reach 100%, because profit is only ever part of the price.
What to enter
- Cost
- What the item costs you: the wholesale price, or materials and labour.
- Selling price
- What you charge, before sales tax. Leave it blank and enter a markup to work the price out instead.
- Markup
- The percentage added to cost. Enter it to find the price, or leave it blank to have it calculated.
Markup and the margin it produces
- 25% markup
- Gives a 20% margin
- 50% markup
- Gives a 33.3% margin
- 100% markup
- Gives a 50% margin. Often called keystone pricing in retail
- 150% markup
- Gives a 60% margin
- 233% markup
- Gives a 70% margin
What this assumes
Cost is the direct cost of the item. Rent, wages and other overheads are not included, so the markup you need in practice is higher than break-even suggests.
Prices exclude sales tax, which was never your revenue.
How to calculate markup
Divide the profit by the cost. To go the other way, multiply the cost by one plus the markup.
- price − cost
- The profit in money
- ÷ cost
- What makes it a markup rather than a margin
Find the profit. Selling price minus cost. A $60 item sold at $100 makes $40.
Divide by the cost. $40 ÷ $60 = 0.667, so a 66.7% markup.
To set a price from a markup, multiply. Cost × (1 + markup). A 50% markup on $60 gives $60 × 1.5 = $90.
To hit a target margin, divide instead. Cost ÷ (1 − margin). A 50% margin on $60 needs $60 ÷ 0.5 = $120, which is a 100% markup.
See a worked example: pricing a $60 item for a 50% margin
- Cost
- $60
- Target margin
- 50%
The instinct is to add 50%: $60 × 1.5 = $90.
But at $90 the profit is $30, and $30 ÷ $90 is only a 33.3% margin.
For a genuine 50% margin, divide: $60 ÷ 0.5 = $120.
At $120 the profit is $60, which is 50% of the price and a 100% markup.
$120, which is a 100% markup
Frequently asked questions
Markup compares profit to your cost. Margin compares the same profit to the selling price.
A $60 item sold at $100 has a 66.7% markup and a 40% margin. Markup is always the bigger number, and it is the one you apply when setting a price.
100%. You need to double the cost, not add half of it.
The pattern is that a margin of m needs a markup of m ÷ (1 − m). So 40% margin needs 66.7% markup, and 60% margin needs 150%.
Doubling the wholesale cost: a 100% markup, giving a 50% margin. It is a traditional retail rule of thumb.
It persists because it is easy and roughly covers overheads in many retail settings. It is a starting point rather than an answer, since it ignores what the market will actually bear.
Yes, easily and often. A 300% markup simply means selling at four times cost, which is normal in areas with high overheads or low volume.
Margin can never exceed 100%. So any figure above 100 must be a markup, whatever the label says.
Yes, and this is where thin markups quietly fail. Markup is calculated on the direct cost only, so rent, wages, software and insurance all have to come out of it.
A 20% markup can look profitable per item and still lose money once overheads are shared across the units you actually sell.
Problems people actually run into
Adding the margin percentage instead of dividing
Wanting a 40% margin and adding 40% to cost is the classic error. On $60 that gives $84, which is only a 28.6% margin — more than eleven points short.
The correct move is to divide by (1 − margin), not multiply by (1 + margin). Applied across a full price list, that difference decides whether the business works.
Setting one markup across everything
A single blanket markup ignores that products differ in how fast they sell, how much space they take and how much handling they need.
Fast-moving staples usually carry lower markups and still earn well on volume; slow specialist items need more to justify the shelf space. A flat percentage overprices the first and underprices the second.
Results are estimates for general information only and are not professional financial, medical, or legal advice. Read our full disclaimer.
Last updated: September 4, 2026