Margin & Markup Calculator
Work out profit margin, markup and selling price from cost.
Preparing the calculator…
How it works
Margin and markup both describe profit as a percentage, but they divide by different numbers. Margin is profit as a share of the selling price. Markup is profit as a share of cost. For a profitable sale with positive cost and selling price, markup is higher than margin.
From a cost and a selling price, the calculator works out profit = price − cost, margin = profit ÷ price × 100 and markup = profit ÷ cost × 100.
It can also find the selling price you need. For a target margin: price = cost ÷ (1 − margin ÷ 100). For a markup: price = cost × (1 + markup ÷ 100).
Enter amounts without VAT, because VAT collected on a sale is not profit. Money and percentages are rounded to 2 decimal places at the end; every step before that is exact.
Worked examples
Bought for 80 AED, sold for 100 AED
- Profit = 100 − 80 = 20.00 AED.
- Margin = 20 ÷ 100 × 100 = 20.00%.
- Markup = 20 ÷ 80 × 100 = 25.00%.
Price for a 25% margin on a cost of 75 AED
- Price = 75 ÷ (1 − 0.25) = 75 ÷ 0.75 = 100.00 AED.
- Check: profit 25 ÷ price 100 = 25% margin. Adding 25% to the cost instead would give 93.75 AED, a margin of only 20%.
Price for a 50% markup on a cost of 19.99 AED
Price = 19.99 × 1.5 = 29.985 AED, which rounds to 29.99 AED.
Selling below cost
- Bought for 120 AED and sold for 100 AED: profit = 100 − 120, a loss of 20.00 AED.
- Margin = −20 ÷ 100 × 100 = −20.00%, and markup = −20 ÷ 120 × 100 = −16.67%.
Frequently asked questions
What is the difference between margin and markup?
Margin divides profit by the selling price; markup divides it by cost. Buying at 80 AED and selling at 100 AED gives a 20% margin and a 25% markup. Quoting one when you mean the other is a common pricing mistake.
How do I set a price for a target margin?
Divide the cost by (1 − margin ÷ 100). For a 25% margin on a cost of 75 AED, the price is 75 ÷ 0.75 = 100 AED. Simply adding 25% to the cost gives 93.75 AED, which is only a 20% margin.
Why can't the target margin be 100% or more?
Margin is a share of the selling price, and profit can never be larger than the price. A 100% margin would mean the item cost nothing, so no price can be worked out from a cost for a margin of 100% or more. Markup has no mathematical upper limit, although this calculator accepts markups of up to 1,000,000%.
Should I include VAT in the cost and price?
No. VAT you collect on a sale is not your income, so including it would overstate your profit. Use the UAE VAT calculator to remove VAT from prices first.
What does a negative margin mean?
The selling price is below cost, so the sale makes a loss. Selling for 100 AED something that cost 120 AED loses 20 AED: a margin of −20% and a markup of −16.67%.
Why is margin shown as not defined?
Margin divides by the selling price and markup divides by cost. When the price is zero, margin has no value; when the cost is zero, markup has no value. The calculator says so rather than showing a misleading number.
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