Markup & margin calculator

Markup and margin are not the same number

Both describe the profit on a job. They differ in what they compare it to, and confusing the two is one of the more expensive pricing mistakes to make repeatedly.

Markup is profit divided by cost. A job costing 600 sold for 900 carries a 300 profit on a 600 cost, which is a 50% markup.

Margin is profit divided by sell price. That same job has a 300 profit on a 900 sale, which is a 33.3% margin.

Same job, same money, two very different percentages. To hit a target margin, divide the cost by 1 minus the margin as a decimal — 600 divided by 0.6 gives 1,000 for a 40% margin. To apply a markup, multiply instead: 600 times 1.4 gives 840.

Which to price on

Margin is the more useful of the two for setting prices, because it answers the question you actually care about: of the money coming in, how much stays. Markup is easier to apply mentally when you are pricing up from a known cost, which is why it persists in trades and wholesale. Whichever you use, be consistent — and when someone quotes you a percentage, ask which one they mean.

Common questions

What is the difference between markup and margin?

They measure the same profit against different bases. Markup is profit as a percentage of what the job cost you. Margin is profit as a percentage of what you charged. Because the sell price is always the larger number, the margin is always the smaller percentage — a 50% markup is a 33.3% margin.

Why can I not have a 100% margin?

Margin is profit divided by sell price, so reaching 100% would mean the job cost you nothing. Asking for a margin of 100% or more has no valid price to solve for, which is why the calculator will not return one. Markup has no such ceiling — a 200% markup simply means charging three times cost.

I want to make 30% on a job. Which one do I mean?

Almost always margin, and it is worth being certain, because the gap is real money. On a 600 cost, a 30% markup gives a sell price of 780. A 30% margin gives 857.14. Quoting the first while intending the second loses you 77.14 on that job.