What's the difference between margin and markup?
Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost price — they're different numbers from the same profit figure.
Calculators
Calculate Profit, Margin, and Markup
Calculate profit, profit margin, and markup from cost price and selling price, right in your browser.
The difference between margin and markup
Enter a cost price and a selling price, and this calculator returns three figures: the raw profit (selling price minus cost price), the profit margin (profit as a percentage of the selling price), and the markup (profit as a percentage of the cost price). Margin and markup are two different percentages of the same profit figure, and mixing them up is a common, genuinely consequential business mistake — a 50% margin and a 50% markup describe very different profitability.
For example, a product costing 100 and selling for 200 has a profit of 100: that's a 50% margin (100 is 50% of the 200 selling price) but a 100% markup (100 is 100% of the 100 cost price). Both numbers are correct, but they answer different questions.
Workflow at a glance
Use this quick flow to understand where the tool fits in your work and what to review before relying on the output.
Review checklist
Before
Confirm cost price and selling price are entered in the correct fields.
After
Double-check whether the audience for this figure expects margin or markup before quoting either one.
When this distinction actually matters
Use it whenever you need to check profitability from cost and selling price, and specifically use margin when discussing profitability as a share of revenue, or markup when discussing how much was added on top of cost.
Who calculates profit this way
Retailers and shop owners
Calculate profit, margin, and markup consistently across products.
Freelancers pricing services
Check margin and markup when setting a price above their costs.
Small business owners
Understand profitability using the correct figure for internal reporting versus supplier negotiations.
Students learning business math
See the concrete numeric difference between margin and markup from the same example.
What this calculator shows
Raw profit amount
The direct currency difference between selling price and cost price.
Profit margin percentage
Profit expressed as a percentage of the selling price.
Markup percentage
Profit expressed as a percentage of the cost price.
All three calculated at once
See the full picture from just two inputs, correctly labeled.
Calculating profit step by step
- 1Enter the cost price.
- 2Enter the selling price.
- 3Read the profit amount, margin percentage, and markup percentage.
- 4Use margin when discussing profitability as a share of revenue, and markup when discussing the percentage added over cost.
Where this comes up
Calculating profit, margin, and markup consistently across products.
Checking margin and markup when setting a service price above costs.
Understanding profitability using the correct figure for internal reporting versus supplier negotiations.
Seeing the concrete numeric difference between margin and markup from a real example.
Where your numbers go
The calculation runs entirely in your browser using the numbers you enter — nothing is sent to a server.
Using the right figure for the right purpose
- Use margin when discussing profitability as a percentage of what you actually sold something for.
- Use markup when discussing how much you added on top of what something cost you.
- Double-check which figure a report, template, or conversation is actually asking for before quoting a number.
- Remember margin will always be a smaller percentage than markup for the same profit amount, since it's measured against the larger selling price.
Profit calculation mistakes to avoid
Confusing margin with markup
They're different percentages of the same profit — a 50% margin and a 50% markup describe very different profitability, and swapping them can seriously mislead a pricing decision.
Assuming margin and markup are always close in value
The gap between them grows larger as profit becomes a bigger share of the selling price.
Entering selling price and cost price in the wrong fields
Swapping them produces a negative or nonsensical profit figure.
Quoting the wrong figure to the wrong audience
Financial reports often expect margin; supplier or cost conversations often expect markup — check which is expected.
Which figure to actually quote
Profit Calculator gives you profit, margin, and markup together specifically because they're so easy to confuse. Take the extra moment to confirm which one a report or conversation actually expects before quoting a number.
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FAQ
Profit Calculator FAQ
Answers for using Profit Calculator on I Love Tool XYZ.
Which one is usually higher?
Markup is generally higher than margin for the same profit, since it's measured against the smaller cost price rather than the larger selling price.
Which figure should I use for financial reporting?
Margin is more commonly expected in financial reporting; check your specific report's convention to be sure.
Is my pricing information sent to a server?
No. The calculation runs entirely in your browser.