How to Calculate Margin vs Markup

1.What margin and markup are

Profit here is selling price (revenue) minus cost. Margin divides that profit by the selling price: how much of each dollar of sales is left after cost of goods. Markup divides the same profit by cost: how much you added on top of what you paid. A 40% margin is not a 40% markup. The Margin Calculator reports profit and margin; markup is shown here so the two are not confused.

2.The formulas

Margin % = (R − C) / R × 100. Markup % = (R − C) / C × 100. Revenue R must be nonzero for margin; cost C must be nonzero for markup. When cost is 60 and price is 100, profit is 40, margin is 40%, and markup is 40/60 ≈ 66.7%. You can convert: markup u and margin m (as decimals) satisfy m = u/(1+u) and u = m/(1−m), with margin below 100%.

\[ \begin{aligned}\mathrm{Margin} &= \frac{R-C}{R}\times 100 \\\mathrm{Markup} &= \frac{R-C}{C}\times 100\end{aligned} \]

3.Worked example

The Margin Calculator defaults to revenue (selling price) $100 and cost $60. Profit = 100 − 60 = $40. Margin = 40/100 × 100 = 40%. Markup = 40/60 × 100 ≈ 66.67%. If you priced a 40% markup on $60 cost instead, selling price would be 60 × 1.40 = $84, and margin would be 24/84 ≈ 28.6% — not 40%.

\[ \mathrm{Margin}=\frac{100-60}{100}\times 100=40\% \]

4.Margin vs markup playground

Move cost and price. The dual wedges show margin % against markup % on the same profit, and the caption substitutes your numbers. This is a teaching widget — no favorites, no full calculator chrome. Open the Margin Calculator when you want the standalone tool.

5.Open the full calculator

The Margin Calculator uses the same (R − C)/R identity, the same $100 / $60 example, and How it works on one page. Use a markup or selling-price tool if you are setting price from cost rather than reading margin from a known price.