How to use it
- Choose margin and markup, selling price, or discount.
- Enter the cost and selling price, or the target percentage.
- Optionally add sales tax.
- Read the margin, markup, profit per unit or sale price.
Margin vs. markup
Both describe profit as a percentage, but they divide by different numbers:
- Gross margin = (price − cost) / price. Profit as a share of the selling price.
- Markup = (price − cost) / cost. Profit as a share of the cost.
Example: a product costs $60 and sells for $100. Profit is $40, so the margin is 40% and the markup is 66.67%. Mixing them up is one of the most common pricing mistakes: a 40% markup on $60 gives a price of $84, which is only a 28.6% margin.
All calculations happen in your browser, and nothing is saved.
Setting a price from a target
Switch to selling price mode and choose whether you know the markup or the margin:
- From markup: price = cost × (1 + markup). $60 with a 25% markup = $75.
- From margin: price = cost / (1 − margin). $60 with a 25% margin = $80.
Margin must be below 100%, because profit can never be more than the whole selling price. Markup has no upper limit.
| Markup | Equivalent margin |
|---|---|
| 25% | 20% |
| 50% | 33.3% |
| 100% | 50% |
| 200% | 66.7% |
Discounts and stacked discounts
In discount mode, enter an original price and a percentage off. Add a second discount, such as a coupon on top of a sale, and the calculator applies them one after the other.
Example: $79.99 with 20% off is $63.99. An extra 10% off the sale price brings it to $57.59. That is a total discount of 28%, not 30%, because the second discount applies to the already reduced price.
Sales tax
In the U.S., sales tax is usually added at the register rather than included in the shelf price, and rates vary by state, county and city. Margin and markup are normally calculated on pre-tax prices, because the tax is collected for the government and is not revenue. If you want to see the price a customer pays, choose a sales tax rate and the calculator shows the tax amount and the total.
Tips for pricing
- Know your full cost: include shipping, packaging and payment processing fees, not just the wholesale price.
- Use margin to compare with industry benchmarks and to plan how much of each sale covers overhead.
- When you run a discount, check the margin that remains: a 20% discount on a product with a 40% margin cuts your profit per unit in half.
To find a plain percentage of a number or a percentage change, use the percentage calculator.
Worked example: pricing a product line
A shop buys mugs for $6.50 each, pays $1.20 per mug in shipping and packaging, and wants a 45% gross margin.
- Full cost: 6.50 + 1.20 = $7.70
- Price for a 45% margin: 7.70 / (1 − 0.45) = $14.00
- Profit per mug: 14.00 − 7.70 = $6.30, which is a markup of about 81.8%.
If the shop later runs a 15% off sale, the price drops to $11.90 and the margin falls to about 35.3%. Checking the margin after a discount before you announce it helps you avoid selling at too thin a profit, especially on items with high shipping costs.
Frequently asked questions
What is the difference between margin and markup?
Margin divides profit by the selling price; markup divides profit by the cost. The same sale has a lower margin percentage than markup percentage.
How do I calculate a selling price from a margin?
Divide the cost by (1 − margin). For a 25% margin on a $60 cost: 60 / 0.75 = $80.
Why don't two discounts add up?
The second discount applies to the reduced price. 20% off and then 10% off is 28% off in total.
Can margin be over 100%?
No. Margin is a share of the selling price, so it is always below 100%. Markup can exceed 100%.
Should margin include sales tax?
Usually not. Sales tax is collected on behalf of the government, so margins are calculated on pre-tax prices.
Last updated: November 12, 2026