Markdown Percentage Calculator
The markdown percentage calculator works out how much a price has been cut, expressed as a percentage of the original selling price. The method is the standard retail relationship: the markdown percentage equals the price reduction divided by the original price, multiplied by 100. The reduction is simply the original price minus the sale price. Retailers use markdowns to clear slow-moving inventory, run promotions and respond to competitors, and the percentage is always measured against the original retail price, not against cost. That is the key difference from markup, which is added to cost to set the selling price; because the two use different references, a markup and a markdown of the same percentage are not opposites. Markdown also differs subtly from a discount, which can be temporary or conditional, though both are calculated the same way. Enter your own original price and sale price to find the markdown, compare promotions, or set a sale price to hit a target reduction. The same logic reverses to find the sale price from a known markdown. Every figure here is computed deterministically from the formula shown below, with a worked example that reconciles exactly to the calculator so you can follow each step and trust the result.
The markdown percentage is the price reduction over the original price, times 100: markdown % = (original - sale) / original x 100. Cutting an $80.00 item to $60.00 is a 25.00% markdown, a 20 dollar reduction.
Markdown percentage formula
Markdown % = ((P0 - P1) / P0) x 100
P0 = original price
P1 = sale price
P0 - P1 = the price reduction
The reduction divided by the original price gives the markdown as a fraction of the starting price. Multiplying by 100 expresses it as a percentage of the original retail price.
Worked example
An item originally priced at 80 dollars is marked down to a sale price of 60 dollars.
- Reduction = 80 - 60 = 20
- Ratio = 20 / 80 = 0.25
- Markdown = 0.25 x 100 = 25%
The markdown is 25.00 percent, a 20 dollar reduction. These are the calculator's default inputs, so the result above matches the widget exactly.
Markdown at different sale prices
Markdown percentage from an original price of 80 dollars.
| Original | Sale | Markdown (%) |
|---|---|---|
| 80 | 72 | 10.00 |
| 80 | 60 | 25.00 |
| 80 | 40 | 50.00 |
Pricing and retail basics: US Securities and Exchange Commission, Investor.gov.
Markdown percentage calculator: frequently asked questions
What is a markdown percentage?
A markdown percentage is the reduction from an original selling price expressed as a percentage of that original price. It equals the price reduction divided by the original price, times 100. Retailers use markdowns to clear slow-moving stock, run promotions and match competitors. A 25 percent markdown means the price was cut by a quarter of its original value.
How do I calculate markdown percentage?
Subtract the sale price from the original price to get the reduction, divide that by the original price, then multiply by 100. If an item priced at 80 dollars is reduced to 60 dollars, the reduction is 20 dollars, divided by 80 is 0.25, times 100 is a 25 percent markdown.
Is markdown the same as discount?
In everyday use the terms overlap, but markdown specifically refers to a permanent reduction in the selling price recorded against the original retail price, while a discount can be a temporary or conditional reduction such as a coupon. Both are calculated the same way: the reduction divided by the original price.
How is markdown different from markup?
Markup is added to cost to set the selling price, while markdown is subtracted from the selling price. They are based on different references, cost for markup and retail price for markdown, so a 25 percent markup and a 25 percent markdown are not opposites and do not cancel out. Keep the two clearly separate.
What is the sale price after a markdown?
Multiply the original price by one minus the markdown percentage written as a decimal. An 80 dollar item with a 25 percent markdown sells for 80 times 0.75, which is 60 dollars. This is the reverse of finding the markdown percentage from a known sale price.
Official sources
- Pricing, retail and investing basics: US Securities and Exchange Commission, Investor.gov. As at 25 June 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 25 June 2026. See our methodology. This is general information, not financial, tax, legal or investment advice.