Markup Calculator
This calculator helps you compute selling price from cost and markup, derive the implied markup from cost and price, and compute gross margin. It supports retail, service, and wholesale pricing decisions and makes the formulas explicit for audit and record-keeping.
Primary intent: determine the right selling price given cost and desired markup. Secondary intent: reconcile pricing decisions with margin targets and verify implied markup from an existing price.
Use when you know unit cost and the markup percentage you want to apply.
Inputs
Results
Selling price
$0.00
| Output | Value | Unit |
|---|---|---|
| Selling price | $0.00 | currency |
Visualization
Methodology
Markup (%) = (Selling price − Cost) / Cost × 100. This is the percentage added to cost to set the selling price.
Selling price = Cost × (1 + Markup% / 100). Use this when you set a target markup to recover costs and achieve target returns.
Gross margin (%) = (Selling price − Cost) / Selling price × 100. Margin expresses profit as a share of final revenue and differs from markup; both are calculated for clarity and compliance with accounting practices.
Expert Q&A
Which should I use: markup or margin?
Use markup when pricing from cost (how much to add). Use margin when evaluating profitability relative to revenue. Both are valid; businesses commonly price with markup but track margin for profitability.
How should I handle taxes, shipping, or discounts?
Be consistent: if cost excludes tax and shipping, enter price excluding them as well. For final consumer pricing that includes tax or shipping, either add those on top of the calculated selling price or include them in cost/pricing inputs depending on your reporting needs.
How do I validate results for accounting or tax purposes?
Document inputs and rounding rules, keep cost-basis records (invoices, bills of materials), and reconcile calculated margins with accounting reports. For tax-specific guidance on inventory valuation and cost methods, consult official tax guidance relevant to your jurisdiction.
What rounding or precision should I use?
Round selling prices to currency smallest unit (e.g., cents) for retail. For internal analysis, keep two to four decimal places for percentages, then round for reporting. Always record the rounding rule used for audits.
Are there recommended markup ranges?
Recommended markup varies by industry, channel, and product lifecycle. Low-margin, high-volume retail differs from specialized services. Use market research and competitor analysis to set ranges; the SBA provides guidance on pricing strategy and market positioning.
Can this calculator handle bulk discounts or tiered pricing?
This tool provides per-unit price calculations. For tiered or volume pricing, compute per-tier cost and markup or use the calculator repeatedly for each tier. For complex tiered models, export inputs to a spreadsheet or use an advanced pricing tool.
Sources & citations
- U.S. Small Business Administration — Price your product — https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis/price-your-product
- Internal Revenue Service — Topics: Inventory — https://www.irs.gov/businesses/small-businesses-self-employed/inventory
- MIT OpenCourseWare — Accounting and finance resources — https://ocw.mit.edu
- U.S. Government Accountability Office — Fundamentals of cost accounting — https://www.gao.gov