Checked 15 October 2026. What was checked. How these pages are maintained.
Markup vs margin
Profit = price − cost. Markup % = profit ÷ cost × 100. Margin % = profit ÷ price × 100. A $40 cost sold at $64 is 60% markup and 37.5% margin. If you want a 40% margin, price = cost ÷ (1 − 0.40).
Worked example
Cost $40, sell at $64: profit $24, markup 60% (24 ÷ 40), margin 37.5% (24 ÷ 64). To hit a 40% margin on a $40 cost, price = 40 ÷ 0.60 = $66.67.
A contractor who says “40% markup” and a store that says “40% margin” are not using the same number. Ask which one they mean before you quote.
The quote that says 40 and means two different prices
Cost is $25. A 50 percent markup means profit is half of cost, so profit is $12.50 and the price is $37.50. Margin on that price is 12.50 ÷ 37.50 = 33.3 percent. A 50 percent margin is a different instruction: profit is half of the selling price, so price = cost ÷ (1 − 0.50) = 25 ÷ 0.50 = $50. Markup on that $50 price is 25 ÷ 25 = 100 percent. Someone who heard “fifty percent” and does not know which word was used is $12.50 apart on a $25 cost.
The form on this page starts from cost and price, then reports both percents. It does not have a “desired margin” box. To hit a margin, divide cost by (1 − margin) on paper, type that price, and confirm the margin line. A 40 percent margin on a $25 cost is 25 ÷ 0.60 = $41.67, and the markup line will read 66.67 percent.
What never enters the percent
Shipping you pay, a card fee, and tax you cannot claim are part of cost if you want the margin to describe money you keep. This page will not add them. A discount after you set the price shrinks the margin. The discount calculator is the second step: take the shelf price, cut it, and put the sale price back here beside the same cost. Sales tax collected from a customer and remitted is not profit and not cost. Leave it out of both boxes.
The two prices hiding in one percent
A 50 percent markup is not a 50 percent margin holds a $25 cost still and prints both prices.
Common questions
Which number do retailers use?
Stores usually talk margin. Vendors and trades often talk markup. Ask which one they mean.
Can margin be 100%?
Only if cost is 0. A 50% margin means half the price is profit.