Markup vs Margin
Understand the difference between markup and profit margin.
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Quick answer
Markup compares profit to cost. Margin compares profit to selling price. Business owners should understand both because they answer different pricing questions.
Step-by-step
- Write down the values you already know.
- Use the correct formula and keep the units consistent.
- Calculate the result and check whether it makes practical sense.
Use the calculator
The easiest way to avoid mistakes is to use the related calculator and then review the formula shown on the page.
Common mistakes
- Using the wrong unit or percentage format.
- Rounding too early.
- Forgetting extra costs, waste, taxes, or allowances where they apply.
Related calculators
Markup CalculatorCalculate markup percentage based on cost and selling price.VAT CalculatorCalculate VAT amount, add VAT to a price, or remove VAT from a VAT-inclusive price.Percentage CalculatorCalculate percentages, percentage change, and percentage of a number.Discount CalculatorFind discount amount and final price after a sale discount.