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Markup vs margin

Markup is profit as a percentage of cost. Margin is profit as a percentage of price. Mixing them up is one of the most common pricing errors.

Price with markup: price = cost × (1 + markup)
Price with margin: price = cost ÷ (1 − margin)

Example: a cupcake costs $2.00. A 50% markup gives $3.00 (margin 33%). A 50% margin gives $4.00 (markup 100%).

Markup	Margin
20%	16.7%
25%	20.0%
30%	23.1%
40%	28.6%
50%	33.3%
60%	37.5%
75%	42.9%
100%	50.0%
150%	60.0%
200%	66.7%

FAQ

Is a 50% markup the same as a 50% margin?

No. A 50% markup yields a 33.3% margin; a 50% margin requires a 100% markup.

Markup vs margin

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FAQ