Markup vs Margin
Same profit, two different percentages. Here's exactly why — and a converter to switch between them.
Markup ↔ Margin Converter
Enter one, get the other.
The Core Difference
Both markup and margin measure the same thing — profit — but they use a different base:
- Margin = Profit ÷ Selling Price × 100
- Markup = Profit ÷ Cost Price × 100
Because the denominator is different, the same transaction produces two different-looking percentages.
Example with £60 cost, £100 selling price
| Metric | Calculation | Result |
|---|---|---|
| Profit | £100 − £60 | £40 |
| Margin | £40 ÷ £100 | 40% |
| Markup | £40 ÷ £60 | 66.67% |
Same transaction. 40% vs 66.67%. Neither is wrong — they just answer different questions.
Conversion Formulas
Common Markup → Margin Conversions
| Markup | Margin |
|---|---|
| 10% | 9.09% |
| 20% | 16.67% |
| 25% | 20% |
| 50% | 33.33% |
| 100% | 50% |
| 200% | 66.67% |
Which Should You Use?
Use margin when discussing financial performance, investor communications, or industry benchmarks — finance generally uses margin.
Use markup when pricing products — it's easier to say "I mark everything up 50%" than to target a specific margin.
The important thing is to never mix them up in the same calculation. Confusing the two is a common (and costly) business mistake.
Common Questions
Is a 50% markup the same as a 50% margin?
No. A 50% markup means you added 50% of cost on top of cost. That gives a margin of 33.33% (profit ÷ selling price). Only a 100% markup produces a 50% margin.
Can markup be higher than 100%?
Yes, easily. Luxury goods and software can have markups of 500%+. Margin, however, can never exceed 100%.