Markup Calculator
Enter cost and selling price to find the markup percentage — and the gross margin it works out to, side by side.
On $100.00 of revenue with $60.00 of cost, the profit is $40.00. That's a markup of 66.67% — and an equivalent gross margin of 40.00%.
Results update as you type.
Formula
Markup is profit as a percentage of cost:
markup% = (revenue − cost) / cost × 100.
To go the other way — set a price from a target markup —
price = cost × (1 + markup%/100).
The equivalent gross margin is always smaller because it divides by the larger number:
margin% = markup% / (1 + markup%/100).
When this calculator helps
Setting the right price is what keeps a product profitable, and most American retailers, wholesalers and small makers price the same way: start with what an item costs them and add a markup percentage on top. This calculator is built for that decision — you know your landed cost and you want a selling price that bakes in enough profit to run the business and still compete.
It fits anyone working out what to charge: a boutique marking up inventory from a distributor, an Amazon or Shopify seller costing a new product, a food truck pricing a menu item, or a contractor adding a markup to materials. Because markup ('cost plus 40 percent') is how suppliers and buyers in the US trade actually talk, pricing in markup keeps you aligned with the rest of your supply chain.
How to read your result
The two figures that matter are the selling price and the dollar profit per unit. The selling price is your cost with the markup added on; the profit is the gap between that price and your cost — the gross dollars that have to cover everything else before anything is yours to keep.
The big one to get right is markup versus margin, because they are not the same number and people mix them up constantly. Markup states profit as a percentage of cost, so $40 of profit on a $60 cost is a 66.67% markup. Margin states that same $40 as a percentage of the selling price, so on a $100 price it's a 40% margin. Markup is always the larger number on a profitable item. To convert between them: margin% = markup% / (1 + markup%/100), so a 50% markup equals a 33.33% margin.
A worked example
Suppose you buy a gadget wholesale for $30 and apply an 80% markup. The markup adds $24, giving a $54 selling price before sales tax. That $24 is your gross profit per unit, and it still has to absorb shipping, payment-processing fees, your storefront costs and your labor before it becomes real profit. As a margin, $24 on a $54 price is about 44% — the figure you'd report in your books even though you set the price as an 80% markup.
Common mistakes to avoid
Most markup mistakes trace back to confusing the two percentages or feeding the calculator numbers that include things they shouldn't.
- Confusing markup with margin — someone who 'wants 30% margin' but 'marks up 30%' actually lands a 23% margin and undercharges.
- Including sales tax in the selling price, which inflates the apparent markup with money that belongs to the state.
- Treating gross profit as take-home — rent, payroll, fees and shrink all come out of it first.
- Copying a competitor's markup without confirming your cost basis is comparable.
Markup and sales tax in the US
In the US, markup is figured on the pre-tax cost, and sales tax is added on top of the selling price at the register — it is never part of your markup. Sales tax is a pass-through you collect on behalf of the state and remit later, so it is not your revenue and not your profit. If you build the tax-inclusive consumer price into your markup calculation, you'll overstate your profit by whatever the local rate happens to be.
Sales tax in the US is messy because it's set at the state and often the local level, so rates differ from one jurisdiction to the next and some states have none at all. A handful of products are exempt depending on the state. None of that changes your markup math — keep the calculation on pre-tax cost and pre-tax price, and treat sales tax as a separate line you collect and pass through.
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Frequently asked questions
What is markup vs keystone vs MSRP?▾
Markup is the percentage on top of cost. 'Keystone' is the retail tradition of doubling cost (100% markup, 50% margin). MSRP — manufacturer's suggested retail price — is what the manufacturer recommends you sell at; how it relates to your cost is the markup you're getting. A 100% markup ('keystone') and a 50% margin describe exactly the same price.
Should I price by markup or by margin?▾
Markup is easier when you know your cost and want to set a price ('cost plus 40%'). Margin is easier when you know your target margin and need to back into a price. Mixing them is the classic small-business pricing mistake: someone who 'wants 30% margin' but 'marks up by 30%' has actually set a 23% margin and left money on the table.
How do I price for a target markup?▾
price = cost × (1 + markup%/100). $60 cost × 1.50 = $90 price (50% markup). This calculator does the reverse — cost and price in, markup out — but the algebra is the same.
Why is markup always higher than margin?▾
Markup uses cost as the denominator; margin uses revenue. Cost is always smaller (on a profitable product), so dividing by it gives a bigger number. Conversion: margin% = markup% / (1 + markup%/100). 50% markup → 33.33% margin; 100% markup → 50% margin; 25% markup → 20% margin.
Does this include sales tax?▾
No — use pre-tax figures for both cost and selling price. US sales tax is a pass-through to the state, not part of revenue. If you include the tax-inclusive consumer price as revenue but a pre-tax wholesale cost, you'll compute an inflated markup that includes the state's tax revenue.