Calculating Markup Percentage
Markup is the amount added to the cost price of goods or services to cover overheads and create a profit. It's typically expressed as a percentage of the cost. Understanding markup is essential for setting selling prices in a cost-plus pricing strategy.
How to Use
Enter any two of the three main values (Cost, Revenue/Selling Price, or Markup Percentage). Leave the field you want to calculate blank.
- Enter the known values.
- Click "Calculate".
- The calculator will determine the missing value, the Gross Profit ($), and the resulting Gross Profit Margin (%).
Formulas Used
- Gross Profit ($): Revenue - Cost
- Markup (%): ((Revenue - Cost) / Cost) * 100%
- Revenue (from Cost & Markup %): Cost * (1 + (Markup % / 100))
- Cost (from Revenue & Markup %): Revenue / (1 + (Markup % / 100))
- Gross Profit Margin (%): ((Revenue - Cost) / Revenue) * 100%
Markup vs. Margin
It's vital not to confuse markup with margin. Markup is profit relative to *cost*, while margin is profit relative to *revenue*. A 100% markup means you doubled your cost (Margin = 50%). A 50% margin means profit is half the selling price (Markup = 100%).
Use this calculator to easily convert between these metrics and set appropriate prices based on your cost and desired markup.