Calculator

Markup Calculator

With a $20 unit cost and a 50% markup, your sale price is $30, leaving $10 profit per unit — a 33.3% profit margin. Raise the markup and the margin rises faster than the dollar profit because margin is measured against price, not cost.

Results

Visualization

Cashbizly provides illustrative business estimates only. Results depend on your inputs and assumptions and are not accounting, tax, or legal advice. Consult a CPA or financial advisor before major decisions. Tax-year figures (mileage, QBI, SEP, etc.) are labelled by year and should be verified at IRS.gov.

How It Works

Markup is the percentage you add to cost: Price = Cost x (1 + Markup%). Profit Margin is the share of the final price that is profit: Margin% = Profit / Price. They are not the same — a 50% markup is only a 33% margin. The SBA pricing guidance uses this cost-plus logic for small-business pricing.

What Should You Do?

Use this when you buy or make a product and need a sticker price. Scenario 1: a coffee roaster with $8/lb cost and a 60% markup prices at $12.80/lb. Scenario 2: a freelancer billing a $50 deliverable with 40% markup charges $70. Scenario 3: compare two suppliers — the cheaper cost at the same markup always wins on both price and margin.

Frequently Asked Questions

What is the difference between markup and margin?

Markup is based on cost (Price = Cost + Markup%); margin is based on price (Margin% = Profit / Price). A 50% markup equals a 33.3% margin. Confusing the two is the most common small-business pricing mistake.

Is a higher markup always better?

Not if it loses sales. Markup sets your floor for profit, but the right number depends on what competitors charge and how price-sensitive your customers are. Use our Pricing Simulator to see the trade-off.

Should service businesses use markup?

Yes. Convert your hourly cost (including overhead) to a price by applying a target markup. Our Service Rate Reverse tool solves the opposite way — from the income you need.

Authoritative References

U.S. Small Business Administration — Pricing — Cost-plus pricing and margin logic for small businesses.
Investopedia — Markup — Defines markup vs margin and the formulas used here.