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Commission Calculator
The Commission Calculator computes sales commission and total earnings based on sales total and commission rate. Supports flat, tiered, and split commission structures.
Discount Calculator
The Discount Calculator computes the sale price, dollar savings, and total discount percentage from an original price and percentage off. Also calculates original price from sale price and discount rate.
Gross Margin Calculator
The Margin Calculator computes gross profit margin percentage and dollar profit from cost and selling price, or finds the required selling price from a target margin. Gross Margin = (Revenue - Cost) / Revenue x 100.
What Is the Markup Calculator?
The Markup Calculator computes the selling price from a cost price and a desired markup percentage, or calculates the markup percentage from known cost and selling prices. Markup = (Selling Price - Cost) / Cost x 100. Unlike margin (which is based on revenue), markup is based on cost. For the revenue-based perspective, see the margin calculator; for how discounts affect the final customer price, see the percent off calculator.
A markup calculator helps you figure out the correct selling price for any product or service by starting from your cost and applying a percentage increase. Markup is the foundation of retail pricing, wholesale agreements, and service billing , understanding the difference between markup and margin is essential for profitable pricing decisions.
Many business owners confuse markup with gross margin, and this mistake leads to underpricing. A 50% markup does not produce a 50% margin. Given that misconception is common enough to affect business survival, working out both numbers for every product you sell is worth carrying out before you publish a price list. According to the U.S. Small Business Administration's pricing guide, most small businesses price too low because they confuse these two concepts.
Markup vs. Gross Margin: The Critical Difference
Markup is calculated as a percentage of cost. Margin is calculated as a percentage of revenue.
| Cost | Markup % | Selling Price | Gross Profit | Gross Margin % |
|---|---|---|---|---|
| $50 | 10% | $55 | $5 | 9.1% |
| $50 | 25% | $62.50 | $12.50 | 20% |
| $50 | 50% | $75 | $25 | 33.3% |
| $50 | 100% | $100 | $50 | 50% |
| $50 | 200% | $150 | $100 | 66.7% |
As a result, if you need a 40% gross margin to cover overhead and build up profits, you must apply a markup of 66.7%, not 40%. The formula to convert: Required Markup% = Desired Margin% / (1 − Desired Margin%).
How to Calculate Selling Price from Markup
- Selling Price = Cost × (1 + Markup / 100)
- Gross Profit = Selling Price − Cost
- Gross Margin% = Gross Profit / Selling Price × 100
Example: A restaurant buys ingredients for a dish at $8 cost. With a 200% markup (standard for food service), the selling price is $8 × 3 = $24. Gross profit is $16. Gross margin is $16 / $24 = 66.7%.
Industry Benchmark Markups
Markup percentages vary dramatically by industry, driven by inventory turnover rates, overhead structures, and competition. That said, knowing your industry's benchmark helps you price competitively while remaining profitable.
Grocery stores typically run 5-15% markup (high volume, thin margins). Clothing retail uses 100-300%. Jewelry can reach 200-1000%. Software products, given near-zero marginal cost, often carry markups exceeding 1000%. The NYU Stern industry margin database provides sector-level data on gross margins that you can use to back-calculate typical markup ranges.
Markup in Service Businesses
Service businesses apply markup to materials and sometimes to labor. A contractor who buys materials at $1,000 and marks them up 25% charges the client $1,250, covering handling costs and generating a margin. With that in mind, separate the markup on materials from the margin on labor when pricing complex projects to narrow down your true profitability by cost category.
For the inverse calculation (finding the selling price from a target margin instead of a markup), use our Gross Margin Calculator. Our Discount Calculator handles the buyer-side view of pricing math.