Margin & Markup Calculator

How to use

1. Choose which figure you want worked out: the selling price, the margin, or the cost.
2. Enter the two figures you already know.
3. Add a quantity if you want the totals as well as the per-unit numbers.
4. Read the margin and the markup together — they answer different questions.

Features

• Solves in all three directions: price from cost and margin, margin from cost and price, cost from price and margin.
• Always shows margin and markup side by side, because a 30% markup is a 23% margin and the difference is somebody's month.
• Refuses a margin of 100% or more, which has no price, instead of printing a number that looks like an answer.
• Handles selling at a loss and says so, rather than treating a negative margin as an error.
• Multiplies through by quantity for revenue, total cost and total profit.

Frequently asked questions

What is the difference between margin and markup?

Both measure the same profit; they divide it by different things. Margin divides profit by the selling price, markup divides it by the cost. Buy at 100 and sell at 125 and you have a 25% markup and a 20% margin. The everyday mistake is hearing "we need 30%" and adding 30% to cost, which leaves a 23% margin — in a low-margin business that gap is the entire profit.

Why can't I enter a margin of 100%?

Because the price is the denominator. A 100% margin means the whole selling price is profit and the goods cost nothing, so there is no price that produces it from a real cost — the formula divides by zero. Above 100% the arithmetic returns a negative price, which is why it is refused rather than displayed. Markup has no such ceiling: a 900% markup is a perfectly ordinary number.

Is this gross margin or net margin?

Gross. It compares the selling price with the cost of the thing you sold, and does not know about rent, salaries, marketing, payment fees or tax. Net margin is what is left after all of those, and it is always lower. Use this for pricing decisions on a product, not for judging the health of the business.

Should I include VAT in the price?

Only if you also include it in the cost, and generally you should not do either. Margins are normally calculated on figures excluding VAT, because the VAT you charge is not yours to keep. If you have a price that includes it, take the tax off first — the VAT calculator does that — and put the net figure in here.

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