Markup calculator
Start with what something costs you and the margin you want, and get the price that delivers it. This is the calculation most people get backwards.
Estimate only. Figures update as you type. Not tax advice — see the note at the bottom of this page.
Why you can't just add your target margin to cost
Wanting a 40% margin does not mean adding 40% to cost. Adding 40% to a $60 cost gives $84, which is only a 29% margin. To actually achieve 40%, you divide the cost by 0.6, giving $100. The gap between those two prices is pure lost profit, and it compounds across every sale.
The higher the target, the wider the error
At a 20% target the mistake is modest. At a 60% target, adding the percentage to cost produces roughly a 37% margin instead. Businesses aiming for premium positioning are exactly the ones most damaged by this error.
Cost has to mean total cost
A price is only as good as the cost figure behind it. For service work that means your time at a realistic rate, not just out-of-pocket expenses. For physical goods it means shipping, payment processing fees, packaging, and returns, all of which quietly erode a margin that looked fine on the spreadsheet.
Common questions
How do I convert markup to margin?
Margin equals markup divided by one plus markup. A 100% markup is a 50% margin; a 50% markup is about a 33% margin.
Can a margin be over 100%?
No. Margin is profit as a share of revenue, so it approaches but never reaches 100%. Markup has no upper limit.
Should I price on cost at all?
Cost sets your floor, not your price. What the outcome is worth to the customer usually matters more, particularly in service work.