Free Business Tool

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.

R
R

Cost

R 0,00

Selling Price

R 0,00

Profit

R 0,00

Margin

0.00%

Markup Percentage0.00%

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.

Formula: Margin = (Profit / Selling Price) × 100

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.

Formula: Markup = (Profit / Cost) × 100

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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