Formula
Markup uses cost as the base, which is why it is larger than the margin on the same price:
Markup = (selling price − cost) / cost
A price below cost is a negative markup.
Assumptions
- Cost is the base you mark up from.
- The selling price is the price before a later discount.
Worked example
A $25.00 cost sold at $40.00 is a markup of 60.00%.
Input definitions
- Cost
- The amount you divide by. It must be greater than zero.
- Selling price
- The price before any extra discount.
Limitations
This is a planning estimate, not accounting, tax, payroll, or advertising advice. The currency control changes the symbol only.
Questions
Why is markup higher than margin?
Markup divides by the smaller number, the cost. Margin divides by the price.
Where do I set a price from a markup percent?
Use the markup price calculator. This page starts from a price you already charge.