Markup is how much you add to what something costs you to arrive at a selling price. It is the natural way to build prices from the bottom up — contractors, distributors and many small retailers think in “cost plus” terms. This calculator applies a markup, measures one, or works back to the cost, and always shows the corresponding gross margin, because the two numbers are easy to confuse.
How to use the markup calculator
- Choose what you know: cost and markup %, cost and selling price, or selling price and markup %.
- Enter the two values.
- Read the result on the tape: cost, price, profit per unit, markup, gross margin and the price multiplier (price as a multiple of cost).
Markup formulas
Markup vs. margin
Markup and margin share the same numerator — the profit — but markup divides by cost while margin divides by price:
| Markup on cost | Gross margin | Price for a $100 cost |
|---|---|---|
| 10% | 9.09% | $110 |
| 20% | 16.67% | $120 |
| 25% | 20% | $125 |
| 40% | 28.57% | $140 |
| 50% | 33.33% | $150 |
| 60% | 37.5% | $160 |
| 75% | 42.86% | $175 |
| 100% (keystone) | 50% | $200 |
| 150% | 60% | $250 |
| 200% | 66.67% | $300 |
| 300% | 75% | $400 |
Markup is always the larger number when there is a profit. A markup can exceed 100%; a margin cannot.
Worked examples
Price from markup. Cost $40 with a 50% markup: 40 × 1.50 = $60.00; profit $20; margin 20 ÷ 60 = 33.33%.
Markup from price. Cost $40, price $55: (55 − 40) ÷ 40 = 37.5% markup, a 27.27% margin.
Cost from price. A $60 price that includes a 50% markup: 60 ÷ 1.5 = $40.00 cost.
Choosing a markup
Cover overhead, not just product cost
Markup on product cost has to pay for rent, payroll, shipping, card fees and returns before any profit remains. A shop with overhead equal to 30% of sales needs a gross margin above 30% — at least a 43% markup — just to break even.
Industry conventions
Grocery items often carry markups of 15% to 30%, apparel and furniture 50% to 100% or more, and restaurant beverages several hundred percent. Service businesses frequently apply a markup to materials and a separate rate to labor.
Price endings and rounding
After applying a markup, many sellers round up to a charm price such as $59.99 or $64.95. The selling price calculator does that rounding for you and also builds in marketplace and payment fees.
If you think in margins rather than markups, use the margin calculator. To solve for any two of cost, price, markup and margin in one place, try the price calculator.
Results are estimates for pricing and assume one unit cost; they are not accounting or financial advice.
Frequently asked questions
How do I calculate markup?
Subtract the cost from the selling price and divide by the cost. An item that costs $40 and sells for $60 has a $20 markup, which is 20 ÷ 40 = 50% markup on cost.
How do I add a markup to a cost?
Multiply the cost by 1 plus the markup as a decimal. A 50% markup on a $40 cost is 40 × 1.5 = $60.
What is keystone pricing?
Keystone pricing is a 100% markup: the retail price is double the wholesale cost. It produces a 50% gross margin and has long been a rule of thumb in apparel, jewelry and gift retail.
Why is my margin lower than my markup?
Markup divides profit by cost; margin divides the same profit by the higher selling price. A 50% markup always equals a 33.33% margin, and a 100% markup equals a 50% margin.
How do I find the cost from a marked-up price?
Divide the price by 1 plus the markup. A $60 price that includes a 50% markup implies a cost of 60 ÷ 1.5 = $40.