Convert between the two, in both directions
Markup is profit as a percentage of your cost. Margin is profit as a percentage of the price you charged. They are never the same number, and pricing at cost plus your target margin under-charges every job. Convert in either direction below.
By Jayden Forshee ·
Margin = (price − cost) ÷ price
Markup = (price − cost) ÷ cost
Markup needed for a target margin = margin ÷ (1 − margin)
Margin produced by a given markup = markup ÷ (1 + markup)
The one worth memorising is the third. A 30% margin needs a 42.9% markup. A 50% margin needs a 100% markup — you have to double your cost. Full explanation and a conversion table: markup vs margin.
A 42.9% markup. The formula is markup = margin ÷ (1 − margin), so 0.30 ÷ 0.70 = 0.429. Pricing at cost plus 30% instead produces a 23.1% margin.
No. A 50% markup is a 33.3% margin. To reach a 50% margin you must mark up 100% — double your cost.
Quote in markup, because a price is built up from cost. Manage the business in margin, because margin is what covers overhead and pays you.