Two percentages, one profit — and the confusion that quietly mis-prices products. Solved in any direction.
Both describe the same profit — the gap between cost and price — but against different bases. Markup measures profit against cost: price = cost × (1 + markup%). Margin measures profit against price: margin% = profit ÷ price. Buy at 60, sell at 100: profit is 40, markup is 66.7% (40/60), margin is 40% (40/100). Same transaction, two very different percentages — and treating them as interchangeable is one of the most expensive small-business spreadsheet errors.
“We want a 50% margin, so mark everything up 50%.” A 50% markup on a 60 cost gives a 90 price — but the margin on that sale is 33.3%, not 50%. To genuinely earn a 50% margin you must charge cost ÷ (1 − 0.5) = 120, which is a 100% markup. The conversion is always: price = cost ÷ (1 − margin%). The shortfall compounds across a whole catalogue, which is why finance teams talk in margin while procurement talks in markup — and why this calculator converts in every direction.
The same math governs project pricing: if a project costs you 6,000 in time (hours × your loaded rate from the rate calculator) and you want a 40% margin, quote 10,000 — not 8,400. Then put the number on a clean quotation and hold it.
Markup is profit as a percentage of cost; margin is profit as a percentage of selling price. Markup is always the larger number for the same transaction.
Price = cost ÷ (1 − margin). For a 40% margin on a 60 cost: 60 ÷ 0.6 = 100. Using cost × 1.4 would give only a 28.6% margin.
Doubling the cost — a 100% markup, equal to a 50% margin. A traditional retail default, sensible only when it covers your actual overheads.
Yes — treat your delivery cost (hours × loaded rate) as the cost, and price for the margin your business needs.