Markup calculator
Enter your cost and markup percentage to see the selling price, profit and gross margin instantly.
How markup is calculated
Markup is the amount you add on top of your cost to reach a selling price, written as a percentage of the cost. The formula is selling price = cost × (1 + markup ÷ 100), and your profit is simply the selling price minus the cost. Gross margin then expresses that profit as a percentage of the selling price — a useful figure because it tells you how much of each dollar of revenue you keep. Markup and margin are easy to confuse: a 50% markup is the same as a 33.3% margin, because the profit ($50 on a $100 cost) is one-third of the $150 price.
Once you've set your price, work out the sales tax to add for your state, and if you're self-employed, estimate what to set aside with the 1099 tax calculator.
How to use it
- Cost
- What it costs you: the purchase price of the material, license or subcontracted work, plus any direct cost — shipping, fees — you want to recover.
- Markup (%)
- The percentage you add on top of cost. If you think in margin on the selling price, convert it first with the table below.
- Results
- Selling price (what you invoice), profit in dollars, and gross margin — the share of the price you keep.
The formulas
- Price = cost × (1 + markup)
- Margin = profit ÷ price = markup ÷ (1 + markup)
- Markup = margin ÷ (1 − margin)
Worked example
A contractor buys $840.00 of materials for a remodel and bills them at a 20% markup: $840.00 × 1.20 = $1,008.00. Profit is $168.00 and the margin is $168.00 ÷ $1,008.00 = 16.7%. If the goal was to keep 20% of the price, the markup had to be 25%: $840.00 × 1.25 = $1,050.00.
Markup to margin conversion
| Markup | Margin | Price on $100 cost |
|---|---|---|
| 10% | 9.1% | $110.00 |
| 20% | 16.7% | $120.00 |
| 25% | 20.0% | $125.00 |
| 30% | 23.1% | $130.00 |
| 40% | 28.6% | $140.00 |
| 50% | 33.3% | $150.00 |
| 75% | 42.9% | $175.00 |
| 100% | 50.0% | $200.00 |
Exact arithmetic on the figures you enter; no external data is used. Methodology
Frequently asked questions
What is markup?
Markup is how much you add to the cost of a product or service to set its price, expressed as a percentage of the cost. A $100 item with a 50% markup sells for $150.
What's the difference between markup and margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A 50% markup equals a 33.3% margin.
How do I calculate selling price from markup?
Selling price = cost × (1 + markup ÷ 100). For a $100 cost at 40% markup, the price is $100 × 1.40 = $140.
What markup do I need for a target margin?
Markup = margin ÷ (1 − margin). To keep a 30% margin you need a markup of 0.30 ÷ 0.70 ≈ 42.9%, not 30%. Pricing at a 30% markup only gives a 23.1% margin.
Should the markup appear on the invoice?
Usually not — the client sees the selling price. The exception is a cost-plus contract, where the agreement says you bill cost plus a stated percentage; then show the cost, the markup and the total as separate lines.