Which one should I use?

Most accounting reports (and most industry benchmarks) talk in margin, because it's a share of sales. Markup is handy for setting prices from cost. Just don't mix them.

Why can margin never hit 100%?

A 100% margin means all of the price is profit — the product cost nothing. Markup has no ceiling: 300% markup is a 75% margin.

What's a good margin?

It depends entirely on the business. Grocery stores live on a few percent; software and services often run 60–80%. Compare yourself to businesses like yours, using the same definition of cost.

Business & Pricing

Markup and Margin Calculator

Markup and margin aren't the same number — and mixing them up is how prices end up too low. Check a price, or find the price for the markup or margin you want, and see what a discount really costs you.

Ben / Reviewed Sep 27, 2026 / v2.0.0

Results

Showing the numbers you calculated

Heads up

A 20% discount means selling 2.14× as many units just to earn the same profit (114.29% more).

Selling price: $80.00
Margin: 37.50%; Profit as a share of the price
Markup: 60.00%; Profit as a share of cost
Profit per unit: $30.00
Price after the discount: $64.00; 21.88% margin, $14.00 profit
Units to earn the same profit: 2.14×; Compared with selling at full price

Margin vs. markup at your cost

The same profit, described two ways — and the price it takes.

Margin vs. markup at your cost
Margin	Markup	Price
10.00%	11.11%	$55.56
15.00%	17.65%	$58.82
20.00%	25.00%	$62.50
25.00%	33.33%	$66.67
30.00%	42.86%	$71.43
35.00%	53.85%	$76.92
40.00%	66.67%	$83.33
45.00%	81.82%	$90.91
50.00%	100.00%	$100.00
60.00%	150.00%	$125.00
70.00%	233.33%	$166.67
80.00%	400.00%	$250.00

What this does

Markup and margin describe the same profit two different ways, and people mix them up constantly. "I mark it up 40%" and "I make a 40% margin" are very different prices.

This checks a price, or finds the price for the markup or margin you want. It also shows what a discount does to your margin, and how many more units it takes to make up for it.

How the math works

Both start with the same profit per unit — they just divide by different things:

markup = (price − cost) ÷ cost
margin = (price − cost) ÷ price

Going the other way, from the percentage to a price:

price for a markup = cost × (1 + markup)
price for a margin = cost ÷ (1 − margin)

Margin is always the smaller number. A 50% margin is a 100% markup — double the cost.

Check my math: a worked example

A product that costs $50.00 and sells for $80.00.

Profit: $80.00 − $50.00 = $30.00 a unit.
Markup: $30.00 ÷ $50.00 = 60.00%. Margin: $30.00 ÷ $80.00 = 37.50%.
With 20% off, the price is $64.00 and the profit drops to $14.00 — you'd have to sell 2.14× as many to make the same money.

These numbers come straight from the calculator using its example inputs — if the math ever changes, this example changes with it.

Mistakes I see a lot

Using markup when you mean margin. Pricing for a "40% margin" with a 40% markup leaves you at about 28.6%.
Leaving costs out of "cost" — freight, packaging, card fees.
Discounting without checking the volume math. A 20% discount on a 37.5% margin takes more than twice the sales to break even on profit.
Comparing your margin to an industry number that includes different costs.

Questions people ask

Which one should I use?: Most accounting reports (and most industry benchmarks) talk in margin, because it's a share of sales. Markup is handy for setting prices from cost. Just don't mix them.
Why can margin never hit 100%?: A 100% margin means all of the price is profit — the product cost nothing. Markup has no ceiling: 300% markup is a 75% margin.
What's a good margin?: It depends entirely on the business. Grocery stores live on a few percent; software and services often run 60–80%. Compare yourself to businesses like yours, using the same definition of cost.

Assumptions and limits

Markup is profit as a share of cost: (price − cost) ÷ cost. Margin is profit as a share of price: (price − cost) ÷ price.
Prices solved from a target are rounded to the cent, and the other percentage is figured from that rounded price.
A margin can't reach 100% (that would take a free product); markup has no upper limit.
"Cost" is whatever you count per unit — usually cost of goods (materials, freight in, direct labor). Overhead isn't in it unless you put it there.
The discount check keeps your cost the same and asks how many more units you'd need to sell to earn the same total profit.

Ben’s notes on this

Related calculators

Break-Even Point
How many units you have to sell before you stop losing money — plus your margin of safety, what it takes to hit a profit goal, and profit at different sales levels.
Contribution Margin
What each sale really leaves you after its own costs, laid out as a contribution income statement — and which lever moves profit most: price, volume, or cost.
Hourly Billing Rate
The hourly rate you need to charge to pay yourself, cover your expenses, and make a profit — once you account for the hours you can't bill and the invoices that don't get paid in full.

Spot an error?

This is a public notebook and I do make mistakes. If a number looks off, tell me — I fix things and note the change in the changelog.

Disclaimer: Educational and planning use only. Results depend on what you enter and may not match your lender, your tax return, or professional accounting treatment. Informational content + opinions only — not tax/legal advice.

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