How to calculate markup
- Enter your cost and the markup percentage you want to get the selling price.
- Or enter the cost and the selling price to find the markup you are actually charging, or the markup and price to work back to the maximum cost.
- The gross margin, profit per unit and price multiplier are shown alongside, and the table converts common markups to margins.
Markup explained
Markup is the amount added to the cost to reach the selling price, expressed as a percentage of the cost. A product that costs 25 with a 60% markup sells for 25 × 1.6 = 40. Retailers often talk in multipliers: "keystone" pricing means doubling the wholesale cost, a 100% markup, which equals a 50% margin. Restaurants commonly mark up drinks by 200–400%, and many trades add a fixed markup to materials and parts.
The key point is that markup and margin are different numbers for the same price. Markup uses cost as the base, margin uses price, so a markup is always larger than the matching margin: 25% markup is a 20% margin, 50% markup is 33.3%, and 100% markup is 50%. When a supplier, accountant or investor quotes a percentage, check which one they mean. To set prices from a target margin rather than a markup, use our Profit Margin Calculator. Calculations happen in your browser and work with any currency.
What is the formula for markup?
Markup % = (price − cost) ÷ cost × 100. Price = cost × (1 + markup ÷ 100).
Is a 50% markup the same as a 50% margin?
No. A 50% markup gives a 33.3% margin. A 50% margin needs a 100% markup.
What markup should a small business use?
Enough to cover overheads and leave a profit. Many retailers use 50–100%; check competitors and your costs.