Free tool
Mark-up and Margin Calculator
The two numbers people mix up, side by side.
A 50% mark-up is a 33% margin. Confusing the two is one of the most expensive arithmetic errors in small business, because it quietly underprices everything.
Last reviewed:
Your result
33.3%
A 50% mark-up gives you this gross margin
Mark-up is measured against cost. Margin is measured against price. They are never the same number.
- Selling price
- £150
- Gross profit per sale
- £50
- Gross margin
- 33.3%
- Mark-up needed for a 50% margin
- 100%
- Price needed for that margin
- £200
- Price gap
- £50
Use margin when you are talking about the health of the business, and mark-up when you are setting a price from a cost.
If competitors appear cheaper, check whether they are quoting mark-up while you are quoting margin. It happens constantly.
Check the unit and percentage before using the result
Mark-up is calculated from cost while margin is calculated from selling price. Enter one consistent unit cost and selling price, and keep VAT treatment consistent with the commercial price being tested.
Use the result to explain a price or cost decision, not to imply that a percentage alone proves profitability. Add delivery time, fixed overheads, refunds, payment timing and capacity constraints when deciding whether the offer is commercially sound.
- A positive margin does not guarantee positive cash in the period.
- Do not compare a VAT-inclusive selling price with an ex-VAT cost without labelling the basis.
- Use the linked break-even and contribution guides for volume and fixed-cost context.
Assumptions this tool makes
- Cost means direct cost of delivering the item or job, not overheads.
- Prices are shown excluding VAT.
The formulas used
- price = cost x (1 + mark_up)
- gross_profit = price - cost
- margin = gross_profit / price
- mark_up_needed_for_target_margin = target_margin / (1 - target_margin)
Estimates only. This is a planning aid, not regulated financial advice, tax advice or a personal recommendation. Figures are rounded deliberately to avoid false precision. Your answers stay in your browser: nothing you type here is sent to us, to a partner or to an advertising platform. Read the full disclaimer.