Profit Margin & Markup Calculator
Calculate profit margin, markup percentage, and optimal selling prices. Essential tool for pricing and profitability analysis.
Enter cost and selling price to calculate margin and markup.
Cost
R 0,00
Selling Price
R 0,00
Profit
R 0,00
Margin
0.00%
Markup to Margin Reference
25% markup
= 20.0% margin
50% markup
= 33.3% margin
75% markup
= 42.9% margin
100% markup
= 50.0% margin
200% markup
= 66.7% margin
Understanding Profit Margin vs Markup
Both margin and markup measure profit, but they use different bases for calculation and serve different purposes in business.
Profit Margin
Margin measures profit as a percentage of the selling price. It tells you what portion of each sale is profit. A 25% margin means R25 of every R100 in sales is profit.
Markup
Markup measures profit as a percentage of the cost. It tells you how much you add to your cost to get the selling price. A 50% markup on R100 cost gives a R150 selling price.
When to Use Each
Use Markup For:
- Setting prices (add X% to cost)
- Quick pricing decisions
- Retail and wholesale pricing
- Contractor/service quotes
Use Margin For:
- Analyzing overall profitability
- Comparing to industry benchmarks
- Financial reporting
- Investment decisions
Remember:
A 50% markup does NOT equal 50% margin. A 50% markup only gives you a 33.3% margin. Always convert between the two carefully.
Frequently Asked Questions
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