Markup Calculator

Markup is the amount added to the cost of a product to set its selling price, expressed as a percentage of the cost. It's the most common way businesses price from a supplier or production cost: take what the item costs you, add a markup, and that's your price. Understanding markup — and how it relates to margin — is essential to pricing profitably.

The calculation is direct. Multiply the cost by the markup percentage to get the profit added, then add it to the cost for the selling price. A $40 item with a 50% markup adds $20, giving a $60 price. Equivalently, multiply the cost by (1 + markup) to get the price in one step. This makes markup easy to apply consistently across a range of products.

The critical thing to understand is that markup and profit margin are not the same number, even though they describe the same profit. Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. Because the selling price is always higher than the cost, a given markup always produces a smaller margin. That $20 profit is a 50% markup on the $40 cost but only a 33% margin on the $60 price. Businesses that set prices by markup but think in terms of margin can end up with thinner profits than they intended.

Choosing the right markup depends on your industry, costs and strategy. It must cover not just the direct cost of the product but also your overheads — rent, wages, marketing — and still leave a profit. Different sectors have very different typical markups: groceries run on low single or double digits, while jewelry, restaurants and fashion often use much higher markups to cover their costs and the items that don't sell.

This calculator turns a cost and a desired markup into a selling price, and shows the margin that markup produces so you can price with both numbers in view. Pricing deliberately — knowing exactly what markup you're applying and what margin it leaves — is one of the simplest ways to protect your profitability.