Markup vs Margin Calculator
Enter your cost and selling price — or a markup / margin percentage — and get profit, markup % and gross margin % live. See why the two are never the same number.
How the numbers work out
Price right, book profit correctly
Our CAs help you set margins, structure GST-inclusive prices and keep clean books.
Disclaimer: Indicative calculator for pricing decisions. Figures exclude GST and other indirect taxes unless you enter GST-inclusive prices. Confirm treatment with your accountant.
Markup vs margin — the key difference
Markup and margin describe the same rupee profit from two different angles. Markup asks "how much did I add on top of my cost?" while margin asks "what slice of my selling price is profit?" Because the denominators differ — cost for markup, selling price for margin — the two percentages are never equal, and markup is always the larger number.
Markup is the profit expressed as a percentage of what the item cost you. Buy at ₹1,000, sell at ₹1,500 → ₹500 profit on ₹1,000 cost = 50% markup. It's how you set a price up from cost.
Margin is the same ₹500 profit expressed as a percentage of the selling price of ₹1,500 = 33.33% margin. It's what shows up in your profit & loss as gross margin.
Markup to margin conversion table
Handy reference for the same profit seen both ways. Notice a 50% markup is only a 33.3% margin, and you need a 100% markup just to reach a 50% margin.
| Markup % | Equivalent Margin % |
|---|---|
| 10% | 9.09% |
| 15% | 13.04% |
| 20% | 16.67% |
| 25% | 20.00% |
| 33.33% | 25.00% |
| 50% | 33.33% |
| 75% | 42.86% |
| 100% | 50.00% |
| 150% | 60.00% |
| 200% | 66.67% |
Worked example
A retailer buys a product for ₹1,000 and sells it for ₹1,500. Here is how the same ₹500 profit reads as markup and as margin.
Key terms explained
Cost price (COGS)
What the goods cost you to buy or produce, before you add any profit — purchase price plus freight and direct costs. Markup is measured on this.
Selling price
The price you charge the customer, before GST. It equals cost plus profit. Margin is measured on this, which is why margin can never reach 100%.
Markup
Profit as a percentage of cost. Used to price up from cost. A 100% markup means you double the cost price to arrive at the selling price.
Gross margin
Profit as a percentage of selling price — the figure that appears in your profit & loss statement. Higher margin means each rupee of sales keeps more profit.
What is the difference between markup and margin?
Markup is profit as a percentage of cost. Margin is profit as a percentage of selling price. A 50% markup on a ₹100 cost gives a ₹150 price and a 33.3% margin — the same rupees, two very different percentages.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin), both expressed as decimals. This tool converts in either direction along with the resulting price.
Why does confusing the two lose money?
Because pricing at "40%" meaning margin when you intended markup, or the reverse, systematically under- or over-prices every item. The gap widens as the percentage rises, and at high percentages it is very large.
Which should I use for pricing?
Set prices from margin, because margin ties directly to the profit-and-loss statement and to break-even analysis. Use markup only as a shortcut when applying a standard uplift to cost.
Does GST affect the markup calculation?
Work with values excluding GST. GST is collected on behalf of the government and passed on, so including it in cost or price distorts the margin.
Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.