The owner's workbench
Markup calculator: from cost to price to margin
Markup is profit as a share of cost. Margin is profit as a share of price. They are not the same number, and mixing them up quietly costs owners money on every quote.
Your numbers
Your results
Price
$125.00
Markup
25.0%
Margin
20.0%
Gross profit
$25.00
Live conversion ledger
| Markup | Margin | Price | Profit |
|---|---|---|---|
| 25.0% | 20.0% | $125.00 | $25.00 |
| 33.3% | 25.0% | $133.33 | $33.33 |
| 50.0% | 33.3% | $150.00 | $50.00 |
| 100.0% | 50.0% | $200.00 | $100.00 |
Email me this result
Guide: Markup vs margin
Related tools
Get the free Owner Track Letter
Weekly numbers for owners, plus a free tool each week. Free, no card.
Get the LetterWhat-if scenarios
- Compare several scenarios side by side
- See which input moves the result most
Members, opening later this year
Estimates only. Results depend on your inputs.
Formulas
- Price = cost × (1 + markup %)
- Margin % = profit ÷ price
- Margin = markup ÷ (1 + markup)
- Markup = margin ÷ (1 − margin)
- Price from a target margin = cost ÷ (1 − margin %)
Worked example
Illustrative example. Numbers are made up to show the math.
Example 1: a cost of $100.00 with a 25% markup gives a price of $125.00, a profit of $25.00 and a margin of 20.00%.
Example 2: a 25% target margin on a $100.00 cost gives a price of $100.00 ÷ (1 − 25%) = $133.33, which is a 33.33% markup.
| Markup | Margin |
|---|---|
| 25% | 20.00% |
| 33% | 24.81% |
| 50% | 33.33% |
| 100% | 50.00% |
How to use it
- Enter cost using a consistent definition.
- Choose markup, target margin or known price.
- Compare price, gross profit and margin; check excluded costs.
Read the explainer
Questions owners ask
What is the difference between markup and margin?
Markup is profit divided by cost. Margin is profit divided by price. The same $25.00 profit on a $100.00 cost is a 25% markup but a 20.00% margin.
Why does a 50% markup not give a 50% margin?
Because margin is measured against the higher selling price. A 50% markup on $100.00 gives a $150.00 price and $50.00 profit, and $50.00 ÷ $150.00 is a 33.33% margin.
How do I turn a margin into a markup?
Markup = margin ÷ (1 − margin). A 25% margin is 25% ÷ 75%, a 33.33% markup.
Should I price from cost or from the margin I need?
From the margin you need. Price = cost ÷ (1 − target margin %). Cost-plus pricing with a familiar markup can land below the margin your overhead requires.
More free tools
Sources
No external research cited. Calculations and illustrative assumptions are shown above; this is not evidence of a real owner outcome.
Educational content, not tax, legal or investment advice.
Last reviewed:
The Owner Track Letter
One cash decision. One AI workflow.
Membership
Become a founding member.
Membership opens later this year. Join the list to hear first. No payment today.
Join the founding members list →