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Margin & Markup Calculator

Cost and price give margin and markup. Add a discount to see the extra volume needed just to stay even.

Free toolsGrowth & StrategyReviewed September 2026

What do you want to work out?

Cost of goods or delivery per unit.

Cost of goods or delivery per unit.

Enter 40 for 40%. Must be below 100%.

Enter 40 for 40%.

Off the selling price.

Gross margin

–

Profit as a share of price

Markup
–
Profit as a share of cost
Profit per unit
–
Price − cost
New price
–
Implied unit cost
–
Price × (1 − margin)
Profit per unit before
–
Profit per unit after
–
Profit per unit change
–
Versus a revenue change of the discount
Extra volume to break even
–
To earn the same total profit

Runs entirely in your browser. Nothing you enter is stored or sent anywhere. Last reviewed September 2026.

Margin to markup reference

Gross marginEquivalent markup
20%25%
30%43%
40%67%
50%100%
60%150%

Markup = margin ÷ (1 − margin). Markup figures rounded to the nearest whole percent.

Margin is not markup, and discounts are not cheap

Margin and markup measure the same $40, but one divides by the price and the other by the cost. Sell a $60 product for $100 and your margin is 40% while your markup is 67%. The words get swapped constantly, and the swap is expensive. A team told to "add 40%" to cost will price at $84 and report a 40% margin, when the real margin is 28.6%. Across a catalogue that error compounds into a gross margin line that never matches the plan. The fix is procedural: decide which term your pricing sheet uses, write the formula in the header, and convert with the table above whenever finance and sales are talking in different units.

Discounts are where the confusion does the most damage. A 10% discount reads as a 10% cost, but it comes entirely out of profit, not out of revenue proportionally. At a 40% margin, a 10% discount removes a quarter of the profit on every unit. At a 25% margin it removes 40%. To earn the same total profit after that 10% discount, the 40%-margin business needs to sell a third more units; the 25%-margin business needs two thirds more. Very few promotions lift volume by that much, which is why so many "successful" campaigns grow revenue and shrink profit at the same time.

The mirror image is worth remembering. A 5% price increase at a 40% margin lifts profit per unit by 12.5%, so volume can fall by about 11% before total profit drops. Pricing moves in both directions are levered by the margin, and the lower the margin, the more violent the lever.

Formulas

Gross margin
= (Price − Cost) ÷ Price
Markup
= (Price − Cost) ÷ Cost
Markup
= Margin ÷ (1 − Margin)
Price for a target margin
= Cost ÷ (1 − Margin)
New price
= Price × (1 − Discount)
New margin
= (Margin − Discount) ÷ (1 − Discount)
Extra volume to break even
= Profit before ÷ Profit after − 1 = Discount ÷ (Margin − Discount)

Frequently asked questions

What is the difference between margin and markup?

Both describe the gap between cost and price, but they divide by different things. Margin is profit as a share of the price; markup is profit as a share of the cost. A product that costs $60 and sells for $100 has a $40 profit, which is a 40% margin and a 66.7% markup. Markup is always the larger number, and the gap widens as margins rise: a 50% margin is a 100% markup. Mixing them up in a pricing spreadsheet is one of the most common ways to underprice a product.

How do I price a product to hit a target margin?

Divide the cost by one minus the target margin. For a $60 cost and a 40% target margin, price is 60 ÷ 0.60, which is $100. Multiplying cost by 1.40 instead gives $84, which is only a 28.6% margin. If your finance team talks in margin and your pricing sheet applies a markup, that is where the shortfall comes from.

How much more do I need to sell to make up for a discount?

Divide the discount by the margin left after the discount. At a 40% margin, a 10% discount leaves 30 points of margin on the original price, so you need 10 ÷ 30, about 33% more units, to earn the same total profit. At a 25% margin the same 10% discount needs 67% more volume. Discounts larger than the margin cannot be recovered by any volume, because every unit sells at a loss.

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