This free markup calculator turns your cost price and markup percentage into a selling price, a profit figure in pounds, and the resulting profit margin. Switch to reverse mode to work backwards from a cost and a price you already have. Everything updates as you type, so you can test a few numbers and settle on a price that actually pays.
How to calculate markup
Markup is what you add on top of your cost, written as a percentage of that cost. To find a selling price from a markup, use:
- Selling price = cost × (1 + markup ÷ 100)
- Profit = selling price − cost
- Profit margin = (profit ÷ selling price) × 100
To go the other way and find the markup from a price you already charge, subtract the cost from the price to get your profit, divide by the cost, then multiply by 100: markup = (price - cost) / cost × 100.
Markup vs margin: the difference that trips people up
Markup and margin describe the same profit in pounds, but they measure it against different things. This is the mistake that quietly eats profit in a lot of small businesses.
- Markup is profit as a percentage of your cost.
- Margin is profit as a percentage of your selling price.
Because the selling price is always bigger than the cost, the margin is always a smaller percentage than the markup for the same sale. If someone tells you they "work on 40 percent" it matters a great deal whether they mean markup or margin, because the price you charge is different.
| Markup on cost | Equivalent margin |
|---|---|
| 20% | 16.7% |
| 40% | 28.6% |
| 50% | 33.3% |
| 100% | 50.0% |
How to convert markup to margin (and back)
Once you know the difference, converting between the two is quick. This is really a margin vs markup calculator in formula form, so you can sanity-check any figure by hand:
- Markup to margin: margin = markup ÷ (1 + markup), with both as decimals. A 40% markup is 0.40 ÷ 1.40 = 0.286, or 28.6% margin.
- Margin to markup: markup = margin ÷ (1 − margin). A 30% margin is 0.30 ÷ 0.70 = 0.429, or 42.9% markup.
If you would rather not do the maths, use the reverse mode of this markup and margin calculator: pop in your cost and the price, and it shows the markup and the margin side by side. It works the same whether you are pricing one job or building a whole price list for your business.
Worked example
Say a part costs you £50 and you want a 40% markup.
Selling price = 50 × (1 + 0.40) = 50 × 1.40 = £70.00
Profit = 70 − 50 = £20.00
Profit margin = (20 ÷ 70) × 100 = 28.6%
So a 40% markup on a £50 cost gives you a £70 price, £20 of profit, and a 28.6% margin. Not 40% margin, which is the point worth remembering.
Frequently asked questions
What is markup?
Markup is the amount you add on top of what a product or service costs you, shown as a percentage of that cost. If an item costs you £50 and you add 40% markup, you add £20 and sell it for £70. Markup is always measured against your cost price.
What is the difference between markup and margin?
Markup is a percentage of your cost. Margin is a percentage of your selling price. They describe the same profit in pounds but from different starting points, so the percentages differ. A 40% markup on a £50 cost gives a £70 price and a 28.6% margin. Margin is always lower than the equivalent markup.
How do I calculate selling price from markup?
Multiply your cost by one plus the markup percentage written as a decimal. For a £50 cost with 40% markup: 50 × 1.40 = £70 selling price. The 0.40 is the 40% markup, and the 1 keeps your original cost in the total.
How do I work out the markup percentage from a price?
Subtract the cost from the selling price to get your profit, divide that profit by the cost, then multiply by 100. If cost is £50 and price is £70, the profit is £20, and 20 ÷ 50 = 0.40, which is 40% markup. Use the reverse mode above to do this automatically.
What is a good markup percentage?
It depends on your trade. Retail often runs 50 to 100%, hospitality can be higher, and trade or wholesale is usually lower. The right markup is the one that covers your costs, your overheads and the profit you need after tax. Do not copy a competitor blindly, as their costs are not your costs.
Does markup include VAT?
No. Markup is calculated on the net cost of the goods or service, before VAT. Add VAT to the final selling price separately if you are VAT registered. Keep VAT out of your markup maths so your profit figure stays accurate.
How do I convert markup to margin?
Divide the markup by one plus the markup, with both written as decimals. A 40% markup is 0.40 ÷ 1.40 = 0.286, which is a 28.6% margin. To go the other way, divide the margin by one minus the margin. This markup and margin calculator does the conversion for you in reverse mode, so you can see both figures side by side.
Is this a business markup calculator for the UK?
Yes. It is a free markup calculator built for UK business owners, so every figure is shown in pounds and rounded the way you would price a real job. Whether you run a shop, a trade or a service, use it as a margin vs markup calculator to set prices that cover your costs and leave the profit you need.
