Free Markup to Margin Calculator (and How to Use It Correctly)

Markup and margin aren't the same — but they’re closely related. Use our free calculator to convert between them instantly, and learn how to apply them properly in your pricing strategies.

May 9, 2025

Gross Margin

margin calculator

Confused about how markup relates to margin? You’re not alone — it’s one of the most common mistakes in business pricing.

Luckily, it’s easy to convert markup to margin once you understand the link between them.

In this guide, we’ll explain the difference clearly, show you the formulas, and provide a free calculator so you can get it right every time.

Quick Explanation: How Markup and Margin Relate

They measure similar ideas — but from different perspectives:

Markup is based on cost.
Margin is based on selling price.

When you apply a markup to your cost price, you create your selling price.
When you calculate margin, you check what proportion of your selling price is profit.

✅ Both help you price products and measure profitability — but you must know which one you're using!

Formulas

Markup to Margin Formula:

Margin (%) = (Markup ÷ (100 + Markup)) × 100

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Margin to Markup Formula:

Markup (%) = (Margin ÷ (100 - Margin)) × 100

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Example

If you apply a 50% markup:

Selling Price = Cost + (Cost × 50%)
Margin = (50 ÷ (100 + 50)) × 100 = 33.33% Margin

✅ Markup of 50% equals a margin of 33.33%.

Why Correct Conversion Matters

Setting prices based on margin when you meant markup can result in selling at too low a price.
Confusion between markup and margin can significantly erode profitability.
Investors and accountants almost always focus on margins, not markups.

Tip: Always check if your systems (POS, invoicing) use markup or margin settings — and convert if needed.

Free Markup to Margin Calculator

Use this simple tool to convert your markup percentage into margin — or vice versa:

Markup to Margin and Margin to Markup Calculator

Enter either a markup or a margin to convert instantly.

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Final Thoughts

Understanding how markup and margin relate protects your profitability and ensures your pricing strategies are solid.

Remember:
Markup builds your price. Margin measures your profit.

Always double-check your conversions — and price smarter!

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Level up your pricing strategy with these essential resources:

Markup vs Margin: What’s the Difference and Why It Matters — Understand the key distinctions before applying your calculator results.
Markup and Margin Formula Explained Simply (With Free Calculator) — Dive deeper into the math behind markup and margin calculations.
Mastering Pricing Strategy: How to Set Prices That Drive Profit Margins — Learn how to use your markup and margin knowledge to build more profitable pricing strategies.

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