Markup & Margin Calculator

Every business adds a markup to what it pays for goods to arrive at a selling price. The markup and the resulting margin sound similar but are two different ways to measure profit — and confusing them is a classic pricing mistake.

The formulas

Selling price = cost × (1 + markup ÷ 100)
Markup amount = selling price − cost
Margin % = markup amount ÷ selling price × 100

Worked example

Cost ₹500, markup 20%:

Selling price = 500 × 1.20 = ₹600
Markup amount = ₹100
Margin % = 100 ÷ 600 × 100 ≈ 16.7%

So a 20% markup on cost produces a 16.7% margin on the selling price — the two numbers are not the same.

Markup vs margin, the difference

• Markup is the profit relative to cost: "I add 20% on top of what I paid."
• Margin is the profit relative to the selling price: "20% of every rupee I charge is profit."

Because margin is a share of the price, it's always smaller than the equivalent markup. A 100% markup gives a 50% margin; a 25% markup gives a 20% margin. Retailers commonly say "we run at a 25% margin" — that means the selling price is cost ÷ 0.75.

Everyday uses

• Retail and e-commerce — pricing products profitably
• Freelancers and agencies — adding a margin to resold services
• Restaurants — food-cost pricing (often a 60–70% markup on ingredients)
• Check your quotes — what margin is a supplier really earning?