Free · No signup · Updated for 2026
Margin vs Markup
calculator
Enter any two values. The other two calculate instantly. Add platform fees, shipping, and tax to see what actually hits your bank account.
Fill in any two. The other two calculate automatically. Click a locked field to edit it instead.
Compare products side-by-side
Add rows for each product. Fill in any two of cost, price, margin, or markup — the other two compute automatically. Best margin is ranked #1.
Need a dedicated page? Open the full Compare tool →
How many units to break even?
Enter fixed costs (monthly overhead, one-time setup, etc.), per-unit variable cost, and your sell price. Set a target profit to see how many units it takes to clear it.
Need a dedicated page? Open the full Break-even tool →
Margin → Markup conversion
Quick reference. See the full chart →
The difference, explained
Margin and markup both measure profit, but from different angles. Margin asks: what fraction of my sale is profit? Markup asks: how much did I add to my cost? Same dollars, different denominator — and that single difference trips up an astonishing number of pricing decisions.
Profit as a share of revenue. The number that lands on income statements. Use it to analyze profitability after the fact.
Profit as a share of cost. The number you actually apply when setting prices. Use it to price a product from a known cost.
Worked examples by industry
Click any example to load it into the calculator above, or visit the full industry page.
Common mistakes that cost real money
Confusing margin and markup
The 50/50 trap. Your accountant talks margin, your sales team talks markup, and the price gets set wrong.
Forgetting platform fees
A 60% gross margin can become a 20% net margin once Stripe, Amazon, and shipping take their cuts.
Reporting profitability in markup
Markup percentages are larger than margin percentages, which can make a business look more profitable than it is.
Frequently asked
How do I convert markup to margin?
Divide markup by (1 + markup), in decimal. A 50% markup (0.5) becomes 0.5 / 1.5 = 33.3% margin. The other way: margin / (1 − margin). A 30% margin becomes 0.3 / 0.7 = 42.86% markup.
What is a good profit margin?
Industry-dependent. Rough net margin benchmarks: retail 2-5%, restaurants 3-9%, ecommerce 5-15%, construction 5-15%, SaaS 10-30% net (70-85% gross). Single-digit net is normal; double-digit is healthy; above 20% is exceptional.
Can margin be over 100%?
No. Margin equals profit divided by selling price, so it caps at 100% (which would require zero cost). Markup, by contrast, divides by cost and can exceed 100% easily — a $1 item sold for $10 has a 900% markup.
Should I price using margin or markup?
Use markup when setting a price from a known cost. Use margin when analyzing after the fact. Confusing them is the most common pricing mistake.
Does margin include taxes and fees?
Gross margin does not include platform fees, shipping, taxes, or indirect costs. Net margin includes all of them. Our calculator's fees section shows both side-by-side.