Markup to Margin Converter
Markup and margin describe the same profit, but against different bases, which is why a healthy-looking markup can hide a thinner margin than you expect. Markup measures profit against cost; margin measures it against the selling price. Mixing them up is one of the most common pricing mistakes in retail and services. Enter your markup percentage and unit cost below, and this converter returns the equivalent gross margin, the selling price, and the profit per unit. It makes cost-based pricing and revenue-based reporting line up exactly.
Markup and margin formulas
markup (decimal) = markup % / 100
selling price = cost * (1 + markup)
profit = selling price - cost
margin % = (profit / selling price) * 100 = markup / (1 + markup) * 100
Margin equals markup divided by one plus markup. The selling price applies the markup to cost, and profit is the difference between price and cost.
Common markup and margin pairs
- 25% markup equals a 20% margin.
- 50% markup equals a 33.33% margin.
- 100% markup equals a 50% margin (keystone pricing).
- Margin always sits below the matching markup because price exceeds cost.
- Use this tool to keep quoted markups consistent with reported margins.
Markup and margin: frequently asked questions
What is the difference between markup and margin?
Markup is profit expressed as a percentage of cost, while gross margin is the same profit expressed as a percentage of the selling price. Because the denominators differ (cost versus price), the two percentages are never equal: a 50% markup equals a 33.33% margin.
How do you convert markup to margin?
Margin equals markup divided by (1 plus markup), with markup as a decimal. For example, a 25% markup converts to 0.25 divided by 1.25, which is 0.20, or a 20% margin. To go the other way, markup equals margin divided by (1 minus margin).
How do markup and margin relate to selling price?
From a known cost, selling price equals cost times (1 plus markup). Equivalently, selling price equals cost divided by (1 minus margin). Both give the same price; they are just two ways of describing the same profit relative to different bases.
Why can margin never reach 100%?
Margin is profit divided by selling price. Profit can approach but never exceed the selling price (cost is always positive), so margin approaches but never reaches 100%. Markup, by contrast, has no upper limit because it is measured against cost.
Which should I use for pricing?
Use markup when you price up from cost, which is common in retail and trades. Use margin when you analyze profitability as a share of revenue, which is how income statements report it. Converting between them keeps cost-based pricing and revenue-based reporting consistent.
Official sources
- U.S. Small Business Administration: Manage your finances.
- U.S. Securities and Exchange Commission, Investor.gov: Investing glossary.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.