How to use the Markup Calculator Classic
Markup is the amount added to a product's cost to arrive at its selling price, expressed as a percentage of that cost. Enter your unit cost and target markup percentage, and the calculator applies the standard retail formula to show the resulting selling price, profit per unit, and — if you enter units sold — total profit.
The formula
- Selling price: Price = Cost × (1 + Markup% / 100). A $25 cost with a 40% markup gives $25 × 1.40 = $35.
- Profit per unit: Price − Cost, which is also Cost × Markup% / 100. In the example above, that's $10 per unit.
- Price including tax: if you charge sales tax, the customer pays Price × (1 + Tax Rate / 100). Sales tax passes through to the tax authority — it is not part of your profit.
Markup vs. margin — not the same number
- Markup is profit divided by cost. Margin is profit divided by selling price. They use different denominators, so they never match above 0%.
- Convert between them with Margin% = Markup% / (100 + Markup%) × 100, or Markup% = Margin% / (100 − Margin%) × 100.
- A 100% markup (doubling the cost) is only a 50% margin — a common mix-up when setting retail prices.
Using the output
This is arithmetic, not advice: it does not know your competitors' prices, your customers' price sensitivity, or your overhead beyond the unit cost you enter. Use the selling price and margin as a starting point, then adjust for market conditions, volume discounts, and fixed costs that aren't part of a single unit's cost.
Frequently Asked Questions
What is the markup formula?
Markup is calculated on cost: Selling Price = Cost × (1 + Markup% / 100). For example, a $25 cost with a 40% markup gives a selling price of $25 × 1.40 = $35. Profit per unit is Selling Price minus Cost, which equals $10 in this example.
What is the difference between markup and margin?
Markup is profit as a percentage of cost; margin (gross margin) is profit as a percentage of selling price. They are related by Margin% = Markup% / (100 + Markup%) × 100. A 40% markup on cost equals a 28.57% gross margin on the selling price — the two numbers are never equal except at 0%.
How do I calculate total profit from markup?
Multiply the profit per unit (Selling Price − Cost) by the number of units sold: Total Profit = (Cost × Markup% / 100) × Units Sold. This assumes every unit sells at the same price with no discounts or returns factored in.
Does the calculator include sales tax?
Yes, optionally. If you enter a sales tax rate, the calculator shows the price the customer actually pays: Price Including Tax = Selling Price × (1 + Tax Rate / 100). Sales tax is collected on top of the marked-up price and is not part of your profit — it is passed through to the tax authority.