Markup calculator: How to calculate markup percentage
Use our markup calculator to calculate markup percentage, selling price, or cost price. Learn the markup formula, compare markup versus margin, and make more informed pricing decisions.
This article was originally published on November 28, 2024 and has been refreshed and re-published with new content on September 30, 2026.
Markup is the amount added to the cost of a product or service, usually expressed as a percentage of that cost. Using a markup calculator makes that calculation easier by helping you find the markup percentage, selling price, or cost price based on the figures you already know.
Markup and margin can be easy to confuse, but getting them mixed up can lead to very different prices. Whether you’re setting prices for the first time or checking an existing calculation, understanding how markup works gives you a clearer starting point for your pricing decisions.
Markup calculator
Use the markup calculator to work with the figures you already know and calculate the one you need.
You can use it to find:
- Selling price: enter the cost price and desired markup percentage.
- Cost price: enter the selling price and markup percentage.
- Markup percentage: enter the cost price and selling price.
Select the calculation you want to make, enter the known figures, and calculate the result.
Key takeaways
- Markup measures how much you add to cost and expresses that increase as a percentage of the cost price.
- You can use a markup calculator to find markup percentage, selling price, or cost price.
- Markup and margin use different bases, so a 50% markup is not the same as a 50% margin.
- A markup calculation gives you a useful pricing reference point, not a final answer. Your full costs, customers, and market conditions also influence the price you charge.
Here’s what we’ll cover
What is markup?
Markup is the amount added to the cost price of a product or service, usually expressed as a percentage of that cost. The markup percentage tells you how large that increase is relative to the cost price.
If an item costs $60 and sells for $100, the $40 difference represents a 66.67% markup on the $60 cost price.
Your cost price is the cost base you use for the calculation, such as the amount you paid to buy an item or the relevant cost of producing it. Markup helps you work from that cost towards a selling price.
How to calculate markup percentage, selling price, and cost price
Markup calculations can work in several directions. You might know the cost and selling price and need to calculate markup percentage, or you may already have a target markup and need to determine the selling price.
This table shows the three main calculations at a glance.
| If you know … | And you want to find … | Formula | Example |
|---|---|---|---|
| Cost price + selling price | Markup percentage | ((Selling price − Cost price) ÷ Cost price) × 100 | $60 cost and $100 price = 66.67% markup |
| Cost price + markup | Selling price | Cost price × (1 + markup as a decimal) | $60 cost and 50% markup = $90 |
| Selling price + markup | Cost price | Selling price ÷ (1 + markup as a decimal) | $90 price and 50% markup = $60 |
How to calculate markup percentage
To calculate markup percentage, subtract the cost price from the selling price, divide the result by the cost price, and multiply by 100. Here’s the markup formula:
For example, if a product costs $60 and sells for $100:
The product is being sold for 66.67% more than its cost price.
Markup percentage and multiplier
The relationship between cost price and selling price can also be expressed as a multiplier. For example, selling an item for twice its cost is a 2× multiplier. That equals a 100% markup and a 50% margin.
| Multiplier | Markup | Margin |
|---|---|---|
| 1.25× | 25% | 20% |
| 1.5× | 50% | 33.33% |
| 2× | 100% | 50% |
| 2.5× | 150% | 60% |
| 4× | 300% | 75% |
| 5× | 400% | 80% |
| 10× | 900% | 90% |
The multiplier includes the original cost. That’s why a 2× multiplier represents a 100% markup rather than a 200% markup.
What is the difference between markup and margin?
Markup and margin both compare cost with selling price, but markup measures the increase over cost, while margin measures gross profit as a percentage of the selling price.
When the selling price is higher than the cost price, the markup percentage will be higher than the margin percentage calculated from the same figures.
| Difference | Markup | Margin |
|---|---|---|
| What it measures | Amount added above cost | Gross profit as a percentage of selling price |
| Base | Cost price | Selling price |
| Formula | ((Selling price − Cost price) ÷ Cost price) × 100 | ((Selling price − Cost price) ÷ Selling price) × 100 |
| Useful for | Working from cost towards a selling price | Reviewing gross profit relative to sales |
Understanding the difference matters because applying the wrong percentage can produce a very different selling price.
Markup versus margin calculation example
Suppose you run a food truck and a burger costs $5 to make.
If you apply a 50% markup, you add half of the $5 cost:
The selling price is $7.50. At that price, the gross margin is 33.33%.
If instead you want a 50% gross margin, the calculation is different:
The selling price required for a 50% margin is $10.
A 50% markup and a 50% margin therefore produce different prices even though the percentage looks the same.
What should you consider when setting markup?
Your costs provide an important starting point, but the price calculated from a target markup still needs to work for your business and your market.
Your cost base and overhead
Start by understanding the cost base you are marking up.
For businesses that sell products, Cost of Goods Sold (COGS) can help distinguish the costs associated with goods sold from broader business expenses.
You also need to understand your overhead. Rent, administrative costs, and other operating expenses may not all belong directly in the cost price of each product, but your overall pricing and sales still need to generate enough gross profit to support those expenses.
The important point is to be consistent about what your cost figure represents. Adding a markup to an incomplete or misunderstood cost base can give you a misleading view of the price you need.
Your margin and pricing goals
Consider the gross margin produced by your chosen selling price as well as the markup percentage.
Markup is useful when working from cost towards a price. Margin gives you another view by showing how much of the selling price remains after the cost used in the calculation.
Neither percentage alone tells you whether the entire business is profitable. Sales volume and operating expenses also affect the result.
Customer demand, value, and competitor pricing
A calculated selling price still has to make sense in the market.
Review what customers are willing to pay, how comparable products are priced, and what makes your offer different. A business with a distinctive product may have more flexibility than one competing with several similar alternatives.
Industry markup figures can provide a reference point when they come from reliable and relevant sources, but they should not automatically become your target. Businesses in the same industry can have different cost structures, customers, and pricing strategies.
Discounts, seasonality, and the product life cycle
The price on the shelf or website is not always the amount you eventually receive.
Planned discounts and promotions can reduce your realized markup and margin. Changes in seasonal demand or where a product sits in its life cycle may also affect the price customers are prepared to pay.
When reviewing a markup, consider how often you expect to sell below the standard price and whether the resulting revenue still works with your costs.
Changes in costs and market conditions
Supplier prices, transportation costs, exchange rates, and other business costs can change over time. When they do, review whether your current markup still supports your pricing goals.
A higher cost does not always mean you can raise your selling price by the same amount. Customer demand and competition may limit how much of a cost increase you can pass on, so the markup you want and the markup the market supports may differ.
Pricing requirements in Canada
Make sure your advertised prices are clear and not misleading. Under Canada’s federal drip-pricing rules, mandatory fixed charges generally need to be included in the advertised price, although government-imposed charges such as sales tax are excluded. You will also need to apply the correct federal and provincial sales-tax treatment, such as GST/HST, PST, or QST, to each sale.
Keep an eye on pricing as your business changes
Setting a markup is only one part of managing pricing and financial performance. Accurate records make it easier to see what products cost, what you sell them for, and how those decisions affect the business.
As your business grows, keeping sales, costs, and pricing data together makes regular reviews easier. Accounting software helps you maintain those records, while cash flow management software can help you monitor how money moves through the business as costs and pricing change.
For retailers managing inventory, sales, and financial information across channels, retail business software can provide a wider view of operations. Growing businesses with more complex financial needs can also explore Sage Intacct.
Frequently asked questions about markup
What is a good markup percentage?
There is no standard markup percentage that is right for every business. A suitable markup needs to cover the relevant costs, support your margin goals, remain realistic for your customers, and reflect conditions in your market. Industry benchmarks can provide context, but only when they come from a reliable source and represent a genuinely comparable business or product.
Can markup be negative?
Yes. If the selling price is lower than the cost price, the markup percentage will be negative because the calculation produces a loss relative to that cost.
What does a 0% markup mean?
0% markup means the selling price is equal to the cost price used in the calculation, so nothing has been added above that cost. It does not necessarily mean the business has broken even overall, because the cost base may not include overhead and other operating expenses.
Can you use a markup calculator for services?
Yes, as long as you define a meaningful cost base for the service. Depending on the business, that could include labour or other costs directly associated with delivering the work, while broader operating expenses may need to be considered separately when assessing the overall price.
Can two products have the same markup percentage but different dollar markups?
Yes. The same markup percentage applied to different cost prices produces different dollar amounts because the percentage is calculated from each product’s cost.
Can markup change if the selling price stays the same?
Yes. If the cost price changes while the selling price stays the same, the markup percentage will also change because cost is the base used in the markup calculation.
How often should you review your markup?
There is no fixed schedule that works for every business. Review your markup when meaningful changes occur in your costs, customer demand, competitor pricing, or business goals rather than assuming the same percentage will continue to work indefinitely.
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