Markup Calculator

How to Use the Markup Calculator

Choose the tab that matches what you know, enter values, and select Calculate.

• Price From Markup takes a cost and a markup percentage and returns the selling price.
• Markup From Price takes a cost and a selling price and returns the markup and margin.
• Price From Margin takes a cost and a target gross margin and returns the price that achieves it.
• Markup and Margin converts one percentage into the other without any prices.

Open Quantity, discount, and sales tax to model a promotion or an order. Load example fills in a retail product with a discount and tax.

Markup Formulas

Discounts apply to the selling price before tax. Sales tax is added for the customer but is not counted as profit, because it is collected on behalf of a tax authority.

Markup Versus Margin

Markup and margin describe the same profit against different bases. Markup compares profit with cost, so it can exceed 100%. Margin compares profit with the selling price, so it always stays below 100% while the price is positive.

The gap matters when you set prices. A 50% markup produces a 33.33% margin, not a 50% margin. To reach a 50% margin, you need a 100% markup. Corporate Finance Institute's markup definition uses the same cost-based formula, and the gross margin entry explains the price-based measure.

Worked Example

A retailer buys a product for $40 and applies a 50% markup. The selling price is $40 × 1.5 = $60, so gross profit is $20 per item and gross margin is 33.33%.

During a sale, the retailer offers 10% off. The price falls to $54, profit falls to $14, and margin drops to 25.93%. With 8% sales tax, the customer pays $58.32, of which $4.32 is tax. Selling 100 units at the sale price earns $1,400 of gross profit.

Choosing a Markup for Different Businesses

The right markup depends on what the cost figure includes and what the business must still pay from gross profit.

• Retail and wholesale usually mark up the landed cost of goods, including freight and duties.
• Service businesses often mark up a loaded labor cost that already includes benefits and overhead.
• Software and SaaS products have low unit costs, so teams tend to price on value and track margin instead. Recurring pricing structures are explained in what B2B SaaS is.
• Resellers of hardware and licenses often work on thin markups, so small discounts can erase profit.

Before choosing a markup, confirm which costs are included. A markup on product cost alone can look healthy while overhead, payment fees, and returns remain uncovered. Small teams that track deals in a CRM can store target markups by product line, and Stack Row's review of CRM software for small companies compares tools that handle quotes.

Methodology and Limitations

• The calculator uses the standard cost-based markup and price-based gross margin formulas shown above.
• Results are rounded for display. Calculations keep full precision internally.
• Gross profit excludes operating expenses, payment processing, shipping to customers, and returns.
• Sales tax rules vary by location and product. The tax field applies one flat rate to the discounted price.
• Currency selection changes the displayed symbol only and does not convert values.
• Inputs stay in your browser. A calculation is saved locally after you select Calculate, and Reset calculator or Forget saved calculation removes it.

Frequently Asked Questions

Resources

• Corporate Finance Institute: markup
• Gross margin
• Markup in business