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How to calculate markup from cost and selling price

Published by Navon Ventures S.A.S · October 27, 2026

Markup describes how much a selling price exceeds its included cost, as a percentage of that cost. It can help check a proposed price, but it does not tell you whether that price covers every expense of running a business. Begin by defining what belongs in unit cost.

Which inputs to use

Unit cost

Use the cost assigned to one unit. A materials-only cost differs from a fully loaded delivery cost. Keep the definition consistent across comparisons.

Selling price

Enter the corresponding price for that unit, using a consistent currency and treatment of taxes and fees.

Formula and worked example

(Price − cost) ÷ cost × 100

For a $60 unit sold at $100, the difference is $40. Divide 40 by 60 and multiply by 100: markup is approximately 66.67%. The amount above the included cost is $40, not $66.67.

Common interpretation mistakes

A 50% markup on $60 gives a $90 price. The $30 difference is one-third of the selling price, so its margin is 33.33%, not 50%. Markup can exceed 100%; the denominator, rather than the size of the percentage, identifies the ratio. Adding a markup and targeting a margin are different pricing operations.

Assumptions and limits

A positive cost is required because markup on zero cost has no finite denominator. A price below cost produces negative markup. Omitted expenses remain excluded. Use profit margin when the question is how much of revenue remains, and compare the two only with consistent cost definitions.

You can also explore Profit margin.