Free tool · Business
Markup vs margin calculator
Convert markup to margin (and back) so your prices actually hit your margin target.
Selling price
$150.00
Markup
50.0%
(price − cost) ÷ cost
Gross margin
33.3%
(price − cost) ÷ price
Gross profit
$50.00
How it works
Markup and margin describe the same dollars from two directions. Markup is profit as a share of your cost; margin is profit as a share of the selling price. A 50% markup is only a 33.3% margin.
Confusing them is one of the most common reasons trade businesses miss their profit targets: if you want a 50% margin you need a 100% markup.
The formula
Markup = (price − cost) ÷ cost. Margin = (price − cost) ÷ price. Price for a target margin = cost ÷ (1 − margin). Margin from markup = markup ÷ (1 + markup).
Worked example
Example: a part costs $100. At a 50% markup you sell it for $150 and keep $50, a 33.3% margin. To get a 50% margin you need to sell it for $200, a 100% markup.
Free download
Flat-Rate Price Book Builder
Work out your true hourly cost, set your billable rate, and price every task with good, better and best options.
Get it free- Overhead and labor cost calculator
- Billable hour and target margin model
- Task pricing sheet with materials markup
- Good / better / best option builder
- Member discount column
Frequently asked questions
It depends on your overhead, competition and whether labor or parts carry your profit. Many shops use a sliding scale: a high markup on low-cost parts and a lower one on expensive equipment. Decide from the margin you need, then convert it to a markup here.
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