Markup Calculator

What is Markup Percentage?

Markup percentage is the amount added to the cost of a product or service to determine its selling price, expressed as a percentage of the cost. It represents how much profit you make relative to what you paid for the item. For example, if you purchase a product for $100 and sell it for $150, you have added $50 to the cost. This $50 profit represents a 50% markup because it is 50% of your $100 cost.

Markup Percentage Formula

The markup percentage formula is:

Markup % = ((Selling Price - Cost) / Cost) x 100

This formula can be rearranged to solve for any variable:

Selling Price: Selling Price = Cost x (1 + Markup % / 100)
Cost: Cost = Selling Price / (1 + Markup % / 100)

Markup vs Gross Margin

Many people confuse markup and gross margin, but they measure profitability differently. Markup is profit as a percentage of cost, while gross margin is profit as a percentage of selling price. Both metrics describe the same profit amount but express it relative to different bases. Markup is always higher than margin for the same transaction because cost is always less than selling price.

Markup %	Gross Margin %	Example (Cost $100)
25%	20%	Sell for $125, profit $25
50%	33.3%	Sell for $150, profit $50
100%	50%	Sell for $200, profit $100
200%	66.7%	Sell for $300, profit $200

How to Use This Markup Calculator

Select your calculation type: Choose what you want to calculate - markup percentage, selling price, or cost.
Enter your values: Input the required values based on your selection.
Analyze results: Review the summary cards, visual breakdown, and key metrics including gross profit and gross margin.

Industry Standard Markup Percentages

Markup percentages vary significantly by industry. Retail typically uses 50-100% markup (keystone pricing), restaurants use 200-300% on food, grocery stores operate on 15-25%, and luxury goods can range from 100-400%. Service industries often apply 50-100% markup on labor while contractors typically use 20-50% on materials.

Frequently Asked Questions

What is markup percentage?

Markup percentage is the amount added to the cost of a product to determine its selling price, expressed as a percentage of the cost. For example, if a product costs $100 and you sell it for $150, the markup is 50% because the $50 profit is 50% of the $100 cost.

How do you calculate markup percentage?

The markup percentage formula is: Markup % = ((Selling Price - Cost) / Cost) x 100. First calculate the gross profit by subtracting cost from selling price, then divide by cost and multiply by 100.

What is the difference between markup and gross margin?

Markup is profit as a percentage of cost, while gross margin is profit as a percentage of selling price. A 50% markup results in a 33.3% gross margin. Markup is always higher than margin for the same profit amount.

What is a good markup percentage?

Good markup percentages vary by industry. Retail typically uses 50-100%, restaurants 200-300%, and luxury goods 100-400%. Factors include competition, operating costs, target customers, and industry standards.

How do I calculate selling price from markup percentage?

Use the formula: Selling Price = Cost x (1 + Markup % / 100). For example, if cost is $100 and markup is 50%, then Selling Price = $100 x 1.5 = $150.

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