Quick answer
How do you calculate Markup?
Use Markup = ((Selling price − Cost) ÷ Cost) × 100. Enter the matching values above to calculate the result instantly.
What it measures
Understanding Markup
Markup measures the amount added to cost to arrive at a selling price. It is expressed as a percentage of cost, making it a practical pricing tool for retailers, wholesalers, makers, and service providers. If an item costs $40 and sells for $60, the $20 difference is a 50% markup because $20 is half of the original cost. The same transaction has a 33.33% profit margin because margin uses selling price as the denominator. Keeping that distinction clear prevents costly pricing errors. Your cost input should include all unit-level expenses relevant to the decision, such as purchase price, inbound shipping, packaging, payment fees, and directly attributable labor. A healthy markup is not universal: it must cover overhead, discounts, returns, taxes where applicable, and the profit required by the business. Use markup to set or check a price, then examine the resulting margin and contribution profit before committing. Competitive positioning and customer willingness to pay still matter; a mathematically sufficient markup does not guarantee market demand.
The math
Markup formula
Worked example
Example calculation
- Calculation
- (($60 − $40) ÷ $40) × 100
- Result
- 50% markup
Step by step
How to use this calculator
- 1Enter the full unit cost.
- 2Enter the current or proposed selling price.
- 3Review the markup and verify the resulting price covers overhead.
Decision support
When this calculator is useful
- Setting retail prices
- Checking supplier cost changes
- Comparing pricing strategies
Common questions
Frequently asked questions
Is a 50% markup a 50% margin?
No. A 50% markup on cost produces a 33.33% margin on selling price.
What costs should I include?
Include costs directly needed to make the item ready for sale, and be consistent across comparisons.
Can markup be negative?
Yes. If selling price is below cost, markup is negative and the item is sold at a unit loss.
How do discounts affect markup?
Use the actual discounted selling price to see the effective markup after the promotion.
Calculation reviewed: 2026-06-18. CalcPilot uses the formula shown above and tests representative values during the production build. See our methodology and correction policy.
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