Seller pricing education tool
Margin vs Markup Calculator
Calculate profit, margin and markup from cost and selling price, and see why margin and markup are different percentages.
- 100% Free
- No Sign Up
- Instant Calculation
Your inputs
Different denominators: Margin uses selling price; markup uses cost. The same profit therefore produces different percentages.
Your results
Margin & Markup Breakdown
If cost is zero, markup safely displays 0% because the ratio has no meaningful denominator.
How to use
- 1
Enter cost
Add the total cost you want to compare.
- 2
Enter selling price
Use the price a customer pays before any excluded costs.
- 3
Compare the metrics
See profit, margin and markup immediately.
What this tool does
Margin and markup describe the same profit from different starting points. Margin measures profit against selling price; markup measures profit against cost. This calculator makes that distinction explicit for every price you enter.
- ✓ProfitSelling price minus cost.
- ✓MarginProfit divided by selling price.
- ✓MarkupProfit divided by cost.
Formula & assumptions
Profit = Selling Price − Cost; Margin = Profit ÷ Selling Price; Markup = Profit ÷ Cost.
- Margin and markup use different denominators, so they are not interchangeable percentages.
- A zero selling price or zero cost safely returns 0% for the ratio with no meaningful denominator.
Frequently asked questions
What is the difference between margin and markup?
Margin divides profit by selling price, while markup divides profit by cost. They are different percentages even for the same sale.
How is profit calculated?
Profit is selling price minus cost.
Why is markup higher than margin on a profitable sale?
Cost is smaller than selling price on a profitable sale, so the same profit is divided by a smaller denominator.
What happens when cost or price is zero?
The calculator safely returns 0% for a ratio without a meaningful denominator.