What this calculator does
It calculates selling price and markup amount from cost and markup percentage. It also shows gross margin so you can compare the two terms.
Business / United States
How to use the markup calculator
This guide explains the inputs, formula, assumptions, example calculation, and the difference between markup and margin.
Who should use it
Sellers, shop owners, and small business operators who need a quick pricing rule for products or menu items.
Input definitions
- Cost: what it costs you to make or buy the item
- Markup percentage: the extra amount you add on top of cost
Formula
- Markup amount: cost × markup percentage
- Selling price: cost + markup amount
- Gross margin: markup amount ÷ selling price
Assumptions
- Cost and markup apply to the same item or product line
- The example uses USD, but the math works for any currency
- Taxes, shipping, discounts, and fees are excluded unless you build them into cost
Quick example
A bakery item costs $30 and uses a 40% markup.
Markup amount = 30 × 40% = $12
Selling price = 30 + 12 = $42
Gross margin = 12 ÷ 42 = 28.6%
How to interpret the result
If you want a 40% markup, you are adding 40% of cost. That is not the same as a 40% gross margin.
Common mistakes
- Using selling price instead of cost as the base
- Confusing markup with margin
- Ignoring overhead or fees that should be part of cost
Limitations and disclaimers
- This is a pricing aid, not accounting or tax advice
- Real pricing may include brand strategy, competition, and promotions
- Margins can vary if the item has variable shipping, labor, or seasonal costs