Free calculator
Markup calculator.
Enter what an item costs you and the markup you want to add. The calculator shows the selling price, the profit on each item and the gross margin that markup gives you.
In short
Markup is the amount you add to the cost of a product to set its selling price, shown as a percentage of the cost. Selling price = cost × (1 + markup ÷ 100). An item that costs £6 with a 50% markup sells for £9 and earns £3 profit. The same item has a gross margin of 33.3%, because margin is measured against the selling price.
Markup is how many small shops price their stock. You know what the wholesaler charged, you know roughly how much you need to add, and you want a shelf price quickly. This markup percentage calculator does exactly that, and shows the margin at the same time so you can check the price is doing its job.
Below you will find the markup formula, a worked example, how markup differs from margin, a conversion table and some pricing examples from everyday retail. Use costs and prices excluding VAT or sales tax throughout.
Conversion table
Markup to margin conversion table.
The gross margin each markup gives you, and the selling price of an item that costs £10 or $10.
| Markup | Gross margin | Price when cost is 10.00 |
|---|---|---|
| 10% | 9.1% | 11.00 |
| 20% | 16.7% | 12.00 |
| 25% | 20.0% | 12.50 |
| 30% | 23.1% | 13.00 |
| 40% | 28.6% | 14.00 |
| 50% | 33.3% | 15.00 |
| 60% | 37.5% | 16.00 |
| 75% | 42.9% | 17.50 |
| 100% | 50.0% | 20.00 |
| 150% | 60.0% | 25.00 |
| 200% | 66.7% | 30.00 |
| 300% | 75.0% | 40.00 |
Margin = markup ÷ (1 + markup). Margins are rounded to one decimal place.
The markup formula
Markup is measured against what you paid. That makes it quick to apply: take the cost, add a percentage of it, and you have the price.
- Selling price = cost × (1 + markup % ÷ 100)
- Profit per item = selling price − cost
- Markup % = (selling price − cost) ÷ cost × 100
- Gross margin % = (selling price − cost) ÷ selling price × 100
Tip. Work from the cost excluding VAT or sales tax, and add the tax after you have set the net price. Otherwise you end up marking up the tax as well.
A worked example
A stationery shop buys notebooks at £2.40 each and wants a 75% markup.
- Markup amount: £2.40 × 0.75 = £1.80.
- Selling price: £2.40 + £1.80 = £4.20, the same as £2.40 × 1.75.
- Profit per notebook: £4.20 − £2.40 = £1.80.
- Gross margin: £1.80 ÷ £4.20 = 42.9%.
- If the shop is VAT-registered and the item is standard-rated at 20%, the shelf price is £4.20 × 1.2 = £5.04.
Many shops would round £5.04 down to £4.99. That cuts the net price to about £4.16 and the margin to about 42.3%, so check the margin still works after rounding to a price point.
Markup vs margin
Markup and margin describe the same profit from two directions. Markup compares the profit with the cost; margin compares it with the selling price. Because the selling price is always higher than the cost, the margin percentage is always lower than the markup percentage for the same item.
Mixing them up causes real pricing mistakes. An owner who wants a 40% margin and adds a 40% markup ends up with a margin of 28.6%. Hitting a 40% margin takes a markup of 66.7%.
- Markup from margin = margin ÷ (1 − margin)
- Margin from markup = markup ÷ (1 + markup)
Use decimals in both formulas, so 40% is 0.4. If you think in margin rather than markup, the profit margin calculator works the other way round.
Markup examples from everyday retail
Shops rarely use one markup for everything. Everyday lines that customers compare on price tend to carry a lower markup and earn through volume; slower, more specialist lines need more. Some illustrations with round numbers:
- A can of soft drink costing $0.55 with a 60% markup sells for $0.88, a 37.5% margin.
- A greetings card costing £0.90 with a 150% markup sells for £2.25, a 60% margin.
- A phone case costing $4.00 with a 200% markup sells for $12.00, a 66.7% margin.
- A bag of compost costing £3.20 with a 40% markup sells for £4.48, a 28.6% margin.
These show the arithmetic, not recommended markups. The right markup for your shop depends on your costs, your competitors and what your customers will pay.
Using markup to set retail prices
A selling price calculator gives you a starting point. Before the price goes on the shelf, check three things: that the margin covers your running costs, that the price looks sensible next to similar products, and that it still works after rounding to a price point such as 99p or $4.99.
Keystone pricing, a 100% markup that doubles the cost, is a common rule of thumb in gift and fashion retail. It gives a 50% margin. It is a reasonable default for slow-moving lines but usually too high for staples that customers compare on price.
Keep prices and costs up to date
Markups drift. A supplier raises a price, the shelf price stays the same, and the margin shrinks without anyone noticing. In POS2026, each product in Products holds its selling price, the supplier orders you record in Purchase help keep cost prices current, and Loss/Profit shows the profit you actually made after discounts and expenses.
Tip. Review markups on your top sellers whenever a supplier sends a new price list.
Questions
Common questions.
Straight answers for shop owners, based on what POS2026 actually does.
How do I calculate markup?
Subtract the cost from the selling price, divide by the cost and multiply by 100. An item bought for £6 and sold for £9 has a markup of (9 − 6) ÷ 6 × 100 = 50%.
How do I add a markup to a cost price?
Multiply the cost by 1 plus the markup as a decimal. For a 30% markup on a $20 item, $20 × 1.3 = $26.
Is a 50% markup the same as a 50% margin?
No. A 50% markup gives a 33.3% margin. To make a 50% margin you need a 100% markup, which doubles the cost.
What markup do I need for a 30% margin?
Divide 0.3 by 0.7 to get 0.4286, a markup of about 42.9%. An item costing £10 would sell for about £14.29.
Should I include VAT or sales tax?
No. Apply the markup to the cost excluding tax, then add VAT or sales tax to the result. Tax you collect is passed on, so it is not part of your profit.
Is this markup calculator free?
Yes, with no sign-up. POS2026 is point-of-sale software that keeps the cost and selling price of every product and shows the profit from your real sales.
Price it once. Track it on every sale.
POS2026 keeps the cost and price of each product and shows your profit after discounts and expenses.
