Markup Calculator
Markup is the percentage added to the cost of a product to arrive at the selling price. It is the foundational calculation in cost-plus pricing and is widely used in retail, wholesale, manufacturing, and service industries when setting prices from a known cost base. Getting markup right ensures you recover your costs, contribute to overheads, and generate the profit margin your business needs to be sustainable.
This calculator works in two modes. If you know the cost and the current selling price, it calculates the markup percentage — useful for auditing existing prices or comparing products. If you know the cost and want to apply a target markup, it calculates the correct selling price. Enter the cost and either the actual or target selling price, and the calculator shows the profit amount, the markup percentage, and the equivalent margin percentage so you can see all three at once.
One of the most common sources of confusion in business pricing is the difference between markup and margin. A 50% markup on a £60 cost produces a selling price of £90 and a margin of 33.3% — not 50%. If a business target says "achieve a 40% margin" and a buyer sets prices using a 40% markup, the margin will only be 28.6%. Use the Margin to Markup Converter to translate between the two precisely, or use the Profit Calculator to set prices from a target margin directly.
Formula
Markup % = ((Selling Price − Cost) ÷ Cost) × 100 Selling Price = Cost × (1 + Markup % ÷ 100)
Markup measures how much you increase the cost to arrive at your selling price. It is always calculated relative to cost, unlike margin which is relative to revenue.
Worked Examples
Frequently Asked Questions
How is markup different from margin?▾
Markup is calculated on cost: (Price − Cost) ÷ Cost. Margin is calculated on revenue: (Price − Cost) ÷ Price. The same transaction yields different percentages for each. A £40 profit on a £60 cost and £100 selling price is a 66.7% markup but only a 40% margin. Always clarify which measure you are using when discussing pricing targets.
What is a standard markup in retail?▾
Keystone pricing uses a 100% markup, which doubles the cost. In practice, markups vary significantly by product category: grocery staples might carry 20–30%, fashion 100–200%, and cosmetics or electronics accessories sometimes 200–400%. The right markup for your business depends on your cost base, competition, and the margin you need to cover overheads and remain profitable.
Can markup exceed 100%?▾
Yes. A 200% markup means the selling price is 3× the cost. Luxury goods, specialty items, and certain services commonly carry markups well over 100%. In software, the cost to produce each additional unit is near zero, so markups can be effectively unlimited. Markup has no theoretical ceiling — what matters is whether customers accept the price.
What is keystone markup?▾
Keystone markup (also called keystone pricing) is a 100% markup, which doubles the cost to set the selling price. If an item costs £50, the keystone price is £100. This is a historical baseline in retail — especially in clothing and home goods — though actual markups vary widely depending on competition, brand positioning, and product turnover speed.
How do I calculate a selling price to achieve a specific margin?▾
To set a price from a target margin, use the formula: Selling Price = Cost ÷ (1 − Margin). For a 30% target margin on a £60 cost: £60 ÷ 0.70 = £85.71. The Profit Calculator handles this directly — enter your cost and target margin to get the selling price and the equivalent markup percentage.
Why do retailers use different markup percentages for different products?▾
Markup varies by product based on sales velocity, competition, perishability, and contribution to overhead recovery. High-volume commodity products carry low markups because they turn over quickly and each sale still generates enough total profit. Niche or seasonal products carry higher markups because slower sales mean each unit must contribute more margin. The blended average markup across a range determines overall business profitability.
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All calculations are for informational purposes only. They should not replace professional financial, tax, or legal advice. Always consult a qualified professional for decisions affecting your finances or business.