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Markup to margin calculator

Convert markup percentage on cost into gross margin percentage on selling price.

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Markup %

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Result

How to use it

Convert markup percentage on cost into gross margin percentage on selling price. The numbers differ because markup and margin use different denominators.

Enter Markup %.
Select Convert.
Compare the calculated margin with the entered markup.

Markup: (price − cost) ÷ cost
Margin: (price − cost) ÷ price
Conversion: markup ÷ (100 + markup) × 100
Lower bound: Markup must be greater than −100%

25% markup converts to 20% margin

Cost 100 with 25% markup gives price 125 and profit 25. Profit ÷ selling price is 25 ÷ 125 = 20%.

50% markup does not mean 50% gross margin. It converts to about 33.33% margin.

The denominator is the whole difference

Markup divides profit by cost, while margin divides the same profit by selling price.

Positive markup produces a lower margin percentage

With cost 100 and price 150, markup is 50% while margin is 33.33%.

Negative markup is mathematically supported above −100%

Selling below cost produces negative profit and therefore negative gross margin.

The reverse conversion uses another formula

To convert a target margin back to markup, use margin ÷ (100 − margin) × 100.

Related references: SI prefixes & units · Number formats · Cooking measures