Profit Margin & Markup Calculator
Calculate gross profit margin % and markup % from cost and selling price. Essential for pricing decisions, wholesale rates, and evaluating profitability.
Margin & markup
Margin vs markup — the key difference
Profit margin is profit as a % of the selling price. Markup is profit as a % of the cost price. Same profit, different base — so the numbers differ.
Example: Cost £80, sell £100. Profit = £20. Margin = 20 ÷ 100 = 20%. Markup = 20 ÷ 80 = 25%.
Common mistake: Many businesses set a 30% markup thinking they have a 30% margin. They don't. A 30% markup gives a 23.1% margin. To achieve a 30% margin, you need a 42.9% markup.
Frequently asked questions
Depends on industry. Retail: 20–50%. SaaS software: 70–80%. Restaurants: 3–9%. Manufacturing: 5–20%. Compare to your industry benchmark rather than a universal standard.
Formula: Selling price = Cost ÷ (1 − Margin). For a 30% margin on a £70 cost item: £70 ÷ 0.70 = £100 selling price.
Formula: Markup = Margin ÷ (1 − Margin) = 0.40 ÷ 0.60 = 66.7% markup.