Finance and accounting
Markup and margin calculator
Convert between cost, selling price, markup and gross margin. Find the price for a target margin or markup, or the margin of a given price.
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Excluding sales tax or VAT.
Result
Method and limits
Markup and margin describe the same profit relative to different bases: markup to cost, margin to selling price.
Markup = (price − cost) / cost Margin = (price − cost) / price
Margin = markup / (1 + markup) Markup = margin / (1 − margin)
Price for a target margin = cost / (1 − margin)Assumptions and limits
- Works per unit; sales tax and VAT should be excluded from the price.
- A margin must be below 100%.
- An educational calculation, not financial, tax, legal or investment advice.
Worked example
A product costing 80 that sells for 100 has a 25% markup and a 20% margin. To earn a 40% margin on a cost of 60, the price must be 100.
References
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