Markup Calculator — Calculate Selling Price, Markup vs Margin Online

Markup is the percentage added TO COST to reach the selling price: markup = (price − cost) / cost × 100. Margin is the percentage of SELLING PRICE that's profit: margin = (price − cost) / price × 100. They use different denominators (cost vs price), so the numbers diverge: a 100% markup on €50 cost = €100 selling price, with margin = (100 − 50) / 100 = 50%. A 50% margin requires a 100% markup; a 33.3% margin requires only 50% markup; a 20% margin requires 25% markup. The confusion costs real money — pricing a product to "get a 30% margin" by adding 30% markup actually delivers a 23.1% margin (30/130 = 0.231), leaving 7 percentage points of profit on the table. Standard textbook treatment: Brealey/Myers/Allen/Edmans, Principles of Corporate Finance 15th ed (2025), Chapter 29 "Financial Analysis". The markup-calculator surfaces both numbers side-by-side so pricing decisions don't depend on which denominator you remembered.

Retail apparel: traditional keystone pricing 100% markup (= 50% margin), popularised in late-19th-century brick-and-mortar retail in the era of manual arithmetic (Levy/Weitz/Grewal, Retailing Management 11th ed 2023, Ch 14). Restaurant food: 200-300% markup (= 67-75% margin) on raw food cost, supporting 5-15% net operating margin after labour + rent. Restaurant alcohol: 400-500% markup (= 80-83% margin), the highest-margin restaurant category — pour cost typically 15-25%. Jewellery: 100%+ markup (= 50%+ margin), often higher for branded. Grocery / supermarket: 25-30% markup (= 20-23% margin) — high volume, low margin. Electronics: 10-20% markup (= 9-17% margin) on commoditised items. Consulting services: 50-100% markup over labour cost. SaaS gross margin 70-90% — marginal cost of an additional user is near zero. Distributors: 25-50% markup (20-33% margin).

Cost-plus pricing computes selling price as cost × (1 + target markup) — the markup-calculator's primary mode; transparent and straightforward to defend in regulated industries (US Government FAR Part 31 cost-reimbursement contracts, UK MOD Single Source Cost Standards) but ignores customer willingness-to-pay. Value-based pricing instead anchors price to the customer's perceived value (e.g., a $50 wrench that saves a plumber $500 in labour can sell for $200, regardless of $5 manufacturing cost) and is the dominant approach for SaaS, premium consumer goods, and pharmaceuticals. The IRS Schedule C (Form 1040) Cost of Goods Sold framework (Pub 334 2025; Line 4 fed from Part III lines 35-42) requires sole-proprietor sellers to report COGS regardless of pricing methodology — beginning inventory + purchases + labour − ending inventory. Small-business taxpayer threshold: $31M average annual gross receipts over 3 prior tax years (indexed) avoids the formal inventory accounting requirement.

Reverse formula (with both inputs in %): markup% = margin% / (1 − margin%/100). For a target margin of 50%: markup = 50 / (1 − 0.50) = 50 / 0.50 = 100% (keystone). For 40%: markup = 40 / 0.60 = 66.7%. For 30%: markup = 30 / 0.70 = 42.9% (NOT 30%, the common error). For 25%: markup = 25 / 0.75 = 33.3%. For 20%: markup = 25%. The markup-calculator's reverse mode automates this — enter cost + target margin, get required selling price + the implied markup. Pricing strategy errors: setting a "30% margin" by adding 30% markup actually delivers 23.1% margin (30/130 = 0.231); setting a 50% margin by adding 50% markup delivers only 33.3% margin. The reverse calculation is critical for buyer/merchandiser teams negotiating wholesale costs that need to support a category-level margin target.

US: FTC 16 CFR Part 238 Guides Against Bait Advertising (originally 8 November 1967; current Title 16 CFR last amended 15 December 2025) prohibits advertising a low-markup loss-leader the seller doesn't intend to sell, then switching the buyer to a higher-margin product. 16 CFR Part 233 Guides Against Deceptive Pricing covers "former price" comparisons (still codified, rarely enforced since the 1970s); the FTC retains broader authority via FTC Act § 5 unfair-or-deceptive-practices regardless of the Guide's enforcement posture. EU: Price Indication Directive 98/6/EC Article 6a (introduced by Omnibus Directive 2019/2161, effective 28 May 2022) requires that any advertised "reduction" reference the lowest price applied during the preceding 30 days — preventing inflated-markup-then-discount tactics common before the rule. State usury ceilings (US): vary widely (Delaware no general cap for corporate or large loans, New York 16% civil / 25% criminal under N.Y. Gen. Oblig. Law § 5-501, California 10% on personal/family/household consumer loans per Cal. Const. Art. XV § 1 — banks and licensed finance lenders exempt); apply to consumer credit interest not retail markup, but constrain markup-on-financed-goods (e.g., rent-to-own).