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Margin to markup calculator

Type a margin and see the markup that produces it — and the reverse. Suppliers quote markups, accountants quote margins, and they are not the same number.
Markup needed
66.7%
Price for a $1 cost
US$1.67
Margin as markup ratio
1.67×

How it is calculated

Markup = margin ÷ (1 − margin).

Margin = markup ÷ (1 + markup).

Common pairs: 20% margin = 25% markup; 25% = 33.3%; 33.3% = 50%; 40% = 66.7%; 50% = 100%; 60% = 150%; 75% = 300%.

Questions

Why is markup always higher than margin?

Both divide the same profit, but markup divides it by the cost, which is always smaller than the price. The gap grows quickly: at a 75% margin the markup is 300%.

Which one should I report?

Margin. It tells you how much of every sale is left to pay for everything else, and it is how financial statements and most benchmarks express profitability.

Can a markup be over 100%?

Yes, and it often is. A margin cannot reach 100%, but a markup has no upper limit.

If you run WooCommerce

WooFinance puts the real margin on every WooCommerce order, so the number you set and the number you keep can be compared. WooFinance is our plugin; the calculator above works the same whether you use it or not.

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