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Profit Margin & Markup Calculator

Two numbers, three answers: your profit, your margin and your markup, or the price you need to charge to hit a target.

By Mohit Sehgal, founder of BahiSathi · Updated 22 Aug 2026

Cost price (₹)Selling price (₹)

Result

Profit: ₹400
Margin Profit ÷ selling price: 33.33%
Markup Profit ÷ cost price: 50%

Margin and markup are not the same number

Both are the same profit, expressed as a percentage of two different bases. Margin divides profit by the selling price. Markup divides profit by the cost price. Because the selling price is always the larger of the two, a margin percentage is always lower than the markup percentage that produced it.

Cost	Selling price	Profit	Margin	Markup
₹800	₹1,000	₹200	20%	25%
₹800	₹1,200	₹400	33.3%	50%
₹800	₹1,600	₹800	50%	100%

Setting prices off a markup percentage while reporting margin to a lender or an investor is a common mix-up, and it always makes the business look more profitable than it is.

Questions

Straight answers.

What is the difference between margin and markup?

Both measure the same profit as a percentage, but against a different base. Margin is profit divided by selling price. Markup is profit divided by cost price. On an item costing ₹800 and selling for ₹1,200, the profit is ₹400: a 33.3% margin and a 50% markup, from the same sale.

How do I work out the selling price for a target margin?

Selling price = cost ÷ (1 − target margin ÷ 100). For a cost of ₹800 and a target margin of 30%, that is ₹800 ÷ 0.7 = ₹1,142.86. Dividing by the cost and the margin percent, not multiplying the cost by the margin, is the part people get wrong.

How do I work out the selling price for a target markup?

Selling price = cost × (1 + target markup ÷ 100). For a cost of ₹800 and a target markup of 30%, that is ₹800 × 1.3 = ₹1,040.

Why is a 50% markup not a 50% margin?

Because they divide by different numbers. A 50% markup on a ₹800 cost gives a ₹1,200 selling price and ₹400 profit, and ₹400 is 33.3% of ₹1,200, not 50%. Pricing off a markup percentage while quoting it as margin overstates how much of the sale price is actually profit.

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