"Just mark it up 50% and you're golden" is one of the most common pricing mistakes a small business or freelancer makes, because a 50% markup and a 50% margin are not the same thing — not even close. Enter your cost and your selling price below and this calculator shows you both numbers side by side, so you know exactly what you're keeping and can stop assuming markup and margin mean the same thing when you set a price.
How it works
Markup and margin both start from the same profit figure — selling price minus cost — but they divide it by two different denominators. Markup divides profit by your cost, answering "how much did I add on top of what this cost me?" Margin divides profit by your selling price, answering "what share of the money that changed hands do I actually keep?" Because the selling price is always bigger than the cost whenever there's a profit, margin is always a smaller percentage than markup for the exact same dollar amount of profit.
The calculator does three things with your cost and price: subtracts to get profit, divides profit by cost for markup percent, and divides profit by price for margin percent. If you enter a cost of $0, markup percent shows as 0 rather than an undefined division — there's no "percent added to nothing" that means anything, but margin still calculates fine since it only depends on price.
Worked example
Say something costs you $100 to produce or acquire, and you sell it for $150.
- Profit: $150 − $100 = $50
- Markup: $50 ÷ $100 × 100 = 50%
- Margin: $50 ÷ $150 × 100 = 33.33%
Same $50 of profit, two different percentages, because markup measures it against the $100 cost and margin measures it against the $150 price. This is the classic mix-up: a business owner who thinks "50% markup" and "50% margin" are interchangeable will price a product expecting to keep half the revenue as profit, and actually keep a third. Over hundreds of sales, that gap is the difference between a healthy business and one that's quietly underfunded.
How to interpret your result
Margin is the number that tells you what's actually happening to your revenue — it's what shows up when you calculate gross profit on a P&L, and it's the figure worth comparing across products or against industry benchmarks. If your margin is thinner than you expected even though your markup felt generous, that's the calculator doing its job: it's telling you the markup you picked doesn't produce the margin you assumed.
Markup is the more convenient number for the moment you're actually setting a price, since you already know your cost and can multiply it up directly. But treating a markup target as if it were a margin target is exactly how businesses underprice themselves — a 100% markup sounds like doubling your money, and it is, but it's only a 50% margin, meaning half of every sale still goes to cost. The bigger the markup number gets, the wider that gap grows: a 400% markup is only an 80% margin, not the 400% it might feel like.
If margin comes back negative, you're selling below cost — the price you entered doesn't cover what the item or service costs you, and no markup framing changes that fact.
Methodology & sources
The formulas: profit = price − cost, markupPercent = (profit / cost) × 100 (0 if cost is 0), and marginPercent = (profit / price) × 100. All three outputs are rounded from the unrounded intermediate profit figure, so they stay internally consistent — the profit shown is exactly what the markup and margin percentages were calculated from, not a separately rounded number that drifts out of sync.
This is standard cost-accounting math, not a proprietary formula — AccountingTools' explainer on the difference between margin and markup covers the same relationship and shows why a fixed markup percentage always produces a smaller margin percentage. If you're setting prices from a target margin rather than a cost-plus markup, work backward: divide your desired profit by cost, not by price, to find the markup percentage that will actually deliver the margin you want.