Margin and markup are not the same number. This page explains the difference, gives a conversion table and an interactive calculator you can run with your own cost and price.
Margin and markup describe the same profit from two angles, so people mix them up and misprice stock. Markup is profit measured against cost. Margin is profit measured against price. This page shows the math, gives a conversion table and lets you run your own numbers.
Data checked: July 18, 2026. The formulas are arithmetic and do not change over time.
markup % = (price - cost) / cost x 100 (profit over cost)
margin % = (price - cost) / price x 100 (profit over price)Same profit on top. The only difference is the bottom number. Price is always bigger than cost, so margin is always the smaller percentage.
Worked example: cost $100, price $125.
profit = 125 - 100 = $25
markup % = 25 / 100 x 100 = 25%
margin % = 25 / 125 x 100 = 20%margin = markup / (1 + markup)
markup = margin / (1 - margin)Set a price from a target: price = cost / (1 - margin) or price = cost x (1 + markup).
| Markup | Margin | Price on a $100 cost |
|---|---|---|
| 10% | 9.09% | $110.00 |
| 15% | 13.04% | $115.00 |
| 20% | 16.67% | $120.00 |
| 25% | 20.00% | $125.00 |
| 30% | 23.08% | $130.00 |
| 35% | 25.93% | $135.00 |
| 40% | 28.57% | $140.00 |
| 50% | 33.33% | $150.00 |
| 60% | 37.50% | $160.00 |
| 70% | 41.18% | $170.00 |
| 75% | 42.86% | $175.00 |
| 80% | 44.44% | $180.00 |
| 90% | 47.37% | $190.00 |
| 100% | 50.00% | $200.00 |
The gap between the two widens as the numbers grow. That is the trap: a supplier quotes a “keystone” 100% markup and a new seller books it as a 100% margin, then wonders where half the money went.
| Question | Use | Why |
|---|---|---|
| What price sets my profit over cost? | Markup | The base is the cost you know |
| What share of each sale do I keep? | Margin | The base is the sale price |
| Supplier quotes a percentage over cost | Markup | Cost plus markup gives the price |
| Finance report or P&L line | Margin | Reporting states profit against revenue |
Never book a supplier’s markup as your margin. On a $100 cost, a 50% markup is a $150 price and a 33.3% margin, not a 50% one.
Both measure the same profit, but against a different base. Markup divides profit by the cost you paid. Margin divides the same profit by the price you sold at. Since the price is larger than the cost, markup is always a larger percentage than margin.
No. A 50% markup means price is cost plus half the cost, which works out to a 33.3% margin. To reach a 50% margin you need a 100% markup, meaning you double the cost.
Use markup to set a price from a known cost: price = cost times (1 + markup). Use margin to judge profitability, because margin tells you what share of each sale you keep. Most retail and finance reporting is stated in margin.
Price = cost / (1 - margin). For a 40% margin on a $30 cost: 30 / (1 - 0.40) = 30 / 0.60 = $50. The calculator on this page does this both ways.