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Markup Calculator
Markup is how much you add on top of cost to set a price. Enter a cost and a markup to get the price, or a cost and a price to find the markup you are using.
Result
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For information only. Results are estimates based on the numbers you enter and the formula shown below. They are not financial, tax, legal or investment advice and do not replace a qualified professional or the official figures from your lender, employer or provider.
How to use this calculator
- Choose whether you know the markup percentage or the selling price.
- Enter the cost per unit.
- Enter the markup or the price. The equivalent gross margin is shown too, because the two are easy to confuse.
The formula
Markup is measured against cost; margin is measured against price. Keystone pricing — doubling the cost — is a 100% markup and a 50% margin.
Worked example
A $40 item with a 50% markup
- Markup amount = 40 × 0.50 = $20.
- Selling price = 40 + 20 = $60.
- Gross margin = 20 ÷ 60 × 100 = 33.33% (or 50 ÷ 150 × 100).
If you sold it for $60 and someone said your margin was 50%, they would be confusing markup with margin.
Frequently asked questions
What is the difference between markup and margin?
Both use the same profit. Markup divides it by cost; margin divides it by price. With cost $40 and price $60, markup is 50% and margin is 33.33%.
What is keystone pricing?
Setting the retail price at double the wholesale cost. That is a 100% markup and a 50% gross margin.
What markup do I need for a 30% margin?
Markup = margin ÷ (100 − margin) × 100 = 30 ÷ 70 × 100 ≈ 42.86%.
Does markup cover my overhead?
Only if you set it high enough. Markup must cover rent, wages, fees and other expenses before anything is left as profit.
Can markup be more than 100%?
Yes. Selling a $10 item for $35 is a 250% markup.
Sources
- IRS Publication 334, Tax Guide for Small Business (gross profit)
- U.S. Small Business Administration — Calculate your startup costs (break-even and pricing)