Margin Calculator

This calculator solves margin, markup, price, or cost from whichever two numbers you already have, and keeps the two most-confused terms in pricing — margin and markup — clearly separated at every step.

For personal planning only — not financial advice.

Reviewed by CalculatorDrive Finance Editorial Board · Last updated

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Choose a calculation type, enter your numbers, and click Calculate to see margin, markup, and formulas.

The short answer

A $70 item sold for $100 makes $30 profit. As a margin (profit ÷ price), that's 30%. As a markup (profit ÷ cost), that's 42.86%. Same deal, same $30, two different percentages — which is exactly why margin and markup get confused so often.

Key takeaways

  • $70 cost, $100 price: 30% margin, 42.86% markup — markup is always the larger number for the same sale.
  • To hit a 30% margin on a $70 cost, price at $70 ÷ 0.70 = $100 — dividing by (1 − margin), not multiplying by (1 + margin).
  • To hit a 50% markup on a $70 cost, price at $70 × 1.50 = $105 — markup does use straightforward multiplication.
  • A 30% margin converts to a 42.86% markup, and the two will always differ except at 0%, where both are zero.

Margin and markup on the same $30 profit

Margin = Profit ÷ Selling Price = $30 ÷ $100 = 30%

Markup = Profit ÷ Cost = $30 ÷ $70 = 42.86%

Both describe the exact same $70-cost, $100-price, $30-profit sale — they just divide by different numbers. Margin measures profit against what the customer paid; markup measures it against what the sale cost you. Because cost is always smaller than price (assuming any profit at all), markup is always the bigger percentage.

Pricing to hit a target margin (the common mistake)

A frequent pricing error is multiplying cost by (1 + target margin) instead of dividing by (1 − target margin). On a $70 cost with a 30% margin target:

Wrong: $70 × 1.30 = $91.00 (this actually yields only a 23.1% margin)

Correct: $70 ÷ (1 − 0.30) = $70 ÷ 0.70 = $100.00 (this yields exactly 30% margin)

The $91 price feels intuitive — cost plus 30% — but it actually produces a 23.1% margin, not 30%, because 30% of $91 isn't the same $30 profit needed. Pricing for markup does use straightforward multiplication (cost × (1 + markup)); pricing for margin requires the division approach instead.

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Frequently Asked Questions

What is profit margin?

Profit margin is profit expressed as a percentage of the selling price. A $70 item sold for $100 has $30 profit and a 30% margin ($30 ÷ $100) — it shows what share of each sale dollar you keep.

What is the difference between margin and markup?

Margin is profit divided by selling price; markup is profit divided by cost. On a $70 cost sold for $100, margin is 30% ($30 ÷ $100) but markup is 42.86% ($30 ÷ $70) — the same $30 profit, two different percentages because the denominators differ.

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

Divide your cost by (1 minus the margin as a decimal), not by multiplying cost by the margin. A $70 cost priced for a 30% margin needs Price = $70 ÷ (1 − 0.30) = $100 — pricing it at $70 × 1.30 = $91 would fall short of the target margin.

Which do businesses use more: margin or markup?

Retailers and wholesalers often think in markup when setting prices. Finance teams and investors typically evaluate performance using margin because it relates directly to revenue.

What is a healthy profit margin?

Margins vary widely by industry. Grocery stores may run 2–5% margins while software or consulting businesses often exceed 20%. Compare against your industry rather than a universal benchmark.

How do I use this margin calculator?

Select what you want to find (margin, price, cost, or margin-to-markup conversion), enter the known values, and click Calculate. Results include the answer, formulas used, and a margin-versus-markup comparison table.

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