Margin vs Markup Calculator
Markup = Profit ÷ Cost × 100 |
Margin = Profit ÷ Selling Price × 100.
They both describe profit — but as a percentage of different things. A 50% markup does not mean a 50% margin.
Calculate from cost price
Enter your cost price and either a margin % or markup % to see all figures at once.
Markup to margin conversion table
Common markup percentages and their equivalent profit margins.
| Markup % | Margin % | Example: £100 cost |
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How the Margin vs Markup Calculator works
This calculator lets you enter a cost price alongside either a markup or a margin percentage, then shows you both figures simultaneously — so you can always see the full picture. It also includes a conversion table covering common markup percentages from 5% to 200% and their equivalent profit margins, making it easy to check standard pricing benchmarks at a glance.
The key relationship to remember is: Margin % = Markup % ÷ (100 + Markup %) × 100. This means a 100% markup equates to a 50% margin, a 50% markup to a 33.3% margin, and a 25% markup to a 20% margin. Going the other way, Markup % = Margin % ÷ (100 − Margin %) × 100. When discussing pricing with suppliers, buyers, or accountants, always confirm which measure is being used to avoid misunderstandings.
UK businesses typically report gross profit margin to Companies House and investors, making margin the standard metric for financial communication. However, many traders and buyers still think instinctively in markup terms when setting prices day to day. Understanding both ensures that a target profitability figure is correctly translated into the selling price you quote to customers.
Frequently asked questions
What is the difference between margin and markup?
Margin (or profit margin) is the profit expressed as a percentage of the selling price. Markup is the profit expressed as a percentage of the cost price. For example, if you buy for £80 and sell for £100, you have a £20 profit. That is a 25% markup (£20 ÷ £80) but only a 20% margin (£20 ÷ £100).
Why does the distinction between margin and markup matter?
Using the wrong figure can seriously distort your pricing and financial reporting. If you target a 30% margin but accidentally apply 30% as a markup, you will earn less profit than planned. Businesses that report gross margin to investors or lenders must use the selling-price-based definition, while buyers and traders often work in markup. Getting them confused can lead to underpricing and cash flow problems.
Which should I use for pricing decisions — margin or markup?
Both have their uses. Markup is practical when you know your cost and need to arrive at a selling price quickly. Margin is more useful when comparing profitability across products or businesses, because it relates profit to revenue. In UK retail and accounting, gross margin is the standard metric, so it is worth understanding both and being clear which you are applying.
How do I convert between margin and markup?
To convert markup to margin: Margin % = Markup % ÷ (100 + Markup %) × 100. To convert margin to markup: Markup % = Margin % ÷ (100 − Margin %) × 100. For example, a 50% markup converts to a 33.3% margin, and a 40% margin converts to a 66.7% markup.
Related: Markup Calculator · Profit Margin