Smarter Than Free calculator
Margin Calculator
Convert between cost, price, gross margin and markup. Both directions. Free, no signup.
Last checked:
Calculator
What is the difference between margin and markup?
Margin = (price − cost) ÷ price. Markup = (price − cost) ÷ cost. A 50% markup is a 33.3% margin.
How do you get price from cost and margin?
Price = cost ÷ (1 − margin). From markup: price = cost × (1 + markup).
Why can markup go above 100% when margin cannot?
Margin divides profit by price, and profit can never be more than the price unless the cost is negative. Markup divides by cost, so it has no ceiling. A 90% margin is a 900% markup.
What does a discount do to your margin?
More than it looks. Cost £60, price £100 is a 40% margin. Take 10% off and it is 33.3%, with profit per sale down from £40 to £30. You now need 33.3% more sales to make the same money.
Should you take VAT out before working out margin?
Yes, if VAT is in the price. The UK standard rate is 20%, so a £120 shelf price is 120 ÷ 1.2 = £100 before VAT. Work out margin on the £100. Other rates apply to some goods and services, so check yours.
Margin to markup conversion
Markup = margin ÷ (1 − margin). Price shown for an item costing £100.
| Margin | Markup | Price at £100 cost |
|---|---|---|
| 10% | 11.1% | £111.11 |
| 20% | 25.0% | £125.00 |
| 25% | 33.3% | £133.33 |
| 30% | 42.9% | £142.86 |
| 40% | 66.7% | £166.67 |
| 50% | 100.0% | £200.00 |
| 60% | 150.0% | £250.00 |
| 75% | 300.0% | £400.00 |
| 90% | 900.0% | £1,000.00 |
The formula
Gross margin % = (price − cost) ÷ price × 100 Markup % = (price − cost) ÷ cost × 100 From cost and margin: price = cost ÷ (1 − margin) From cost and markup: price = cost × (1 + markup) From price and margin: cost = price × (1 − margin)
Worked example
Cost £80, sell at £100.
Margin = 20 ÷ 100 = 20%. Markup = 20 ÷ 80 = 25%.
Same pounds of profit, different denominator. That is the whole trap.
Methodology
How it calculates
- Converts among cost, price, gross margin and markup. Margin divides by price; markup divides by cost.
Formula
Gross margin % = (price − cost) ÷ price × 100 Markup % = (price − cost) ÷ cost × 100 From cost and margin: price = cost ÷ (1 − margin) From cost and markup: price = cost × (1 + markup) From price and margin: cost = price × (1 − margin)
Assumptions
- Gross margin / markup only. No VAT, discounts or overhead allocation.
Edge cases
- A 50% markup is a 33.3% margin. Margin of 100% is impossible (price would be infinite).
Sources
Last checked:
FAQ
Is margin the same as markup?
No. Margin divides by selling price. Markup divides by cost. A 50% markup is a 33.3% margin.
Does this include VAT or fees?
No. Enter the cost and price you care about. Add tax yourself if you need it.
Sources
Rates, rules or specs last checked 1 Nov 2026. Confirm on the official page before you act.
Not financial advice. This calculator is for education only. Double-check results before you make money decisions. Past moves do not predict future ones.