Calculation
Mathematical Formula For Calculating Markup
Markup = (Selling Price − Cost) / Cost × 100
Example Broken Down With Steps
You buy a product for $60 and sell it for $100.
Step 1: Find the profit: 100 − 60 = 40
Step 2: Divide profit by cost: 40 / 60 = 0.667
Step 3: Convert to percentage: 0.667 × 100 = 66.7%
Result: The markup is 66.7%.
Further Explained
Markup expresses profit as a percentage of the cost. It tells you how much you added to the cost to arrive at the selling price. A 66.7% markup means you added $0.667 in profit for every $1.00 of cost.
Markup vs. Margin: A Common Source of Confusion
Markup and margin use the same profit amount but divide by different bases, producing different percentages. A 50% markup does not mean a 50% margin.
Side-by-Side Comparison
CostSelling PriceProfitMarkupMargin$50$75$2550%33.3%$50$100$50100%50%$50$150$100200%66.7%
Quick Reference: Markup to Margin
MarkupEquivalent Margin25%20%33.3%25%50%33.3%100%50%200%66.7%
Conversion Formulas
To convert between markup and margin:
Margin = Markup / (1 + Markup)
Markup = Margin / (1 − Margin)
(Use decimal form: 50% = 0.50)
Markup is always the larger number. They are only equal when both are 0%.
For margin calculations, see our Margin Calculator.