Markup vs Margin Calculator
Markup is calculated on cost; margin is on selling price. They produce different selling prices for the same percentage. This calculator shows you exactly how.
If you apply 50% markup
The same percentage, different result
If you instead used 50% margin (instead of markup), your selling price would be $200.00 — a $50.00 difference.
| 50% markup | 50% margin | |
|---|---|---|
| Cost | $100 | $100 |
| Selling price | $150.00 | $200.00 |
| Profit | $50.00 | $100.00 |
| Effective margin | 33.33% | 50.00% |
| Effective markup | 50.00% | 100.00% |
Quick conversion reference
How this calculator works
Enter your cost and either a markup or margin percentage. The calculator computes the selling price, profit, and shows the other metric for comparison. The key insight: markup is a percentage of your cost, while margin is a percentage of the selling price.
What affects your pricing
- Markup is calculated on cost; margin is on selling price — they produce different numbers
- A 50% markup is not the same as a 50% margin — the selling price differs significantly
- Always calculate from the correct base to avoid underpricing your work
Frequently asked questions
What's the difference between markup and margin?
Markup is the percentage added to your cost to determine selling price. Margin is the percentage of the selling price that is profit. A 50% markup on a $100 cost gives a $150 selling price with 33.3% margin. A 50% margin on a $100 cost gives a $200 selling price with 50% markup.
How do I convert markup to margin?
Divide the markup by (1 + markup). For example, 50% markup = 0.50 / 1.50 = 33.3% margin. To go the other way, margin ÷ (1 − margin) gives the markup — so a 33.3% margin equals a 50% markup.
Which should I use — markup or margin?
Use margin if you want to know what percentage of revenue is profit. Use markup if you want to know how much to add to cost. Most businesses track margin because it directly shows profitability relative to revenue.
Why is a 50% markup not the same as a 50% margin?
Markup is based on cost, while margin is based on selling price — two different bases. A 50% markup on $100 cost gives a $150 price and $50 profit (33% margin). A 50% margin on the same $150 sale means $75 is profit ($75 markup on cost).
How do I set a selling price using markup?
Multiply your cost by (1 + desired markup). So a $50 cost with a 40% markup sells for $50 × 1.4 = $70. Enter your cost or desired margin in this calculator to get the correct price instantly.
What's a good profit margin for freelance work?
Most freelancers aim for a 30–50% margin once they factor in expenses, taxes, and non-billable time. If your margin is under 20%, you may be underpricing your services.
How do I know if I'm underpricing my work?
If your margin is below 20–30% or you regularly run out of billable hours while still not hitting income goals, you're likely underpricing. Recalculate using margin rather than markup to see your real profitability per job.