How to Convert Markup to Margin (and Back) — With Table
Convert markup to margin with one formula: margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin). Derivation, full conversion table, and memory tricks.
Markup and margin describe the same profit from different bases (cost vs price), so the numbers never match. The conversion is one line:
Margin = markup ÷ (1 + markup); Markup = margin ÷ (1 − margin)
Why they differ
Let cost be C, price P, profit M = P − C:
- Markup = M ÷ C — “how much was added on cost”
- Margin = M ÷ P — “what share of the price is profit”
Since P = C + M ≥ C, the margin’s denominator is larger, so margin ≤ markup whenever profit is positive.
Derivation: margin = M/P = M/(C+M) = (M/C)/(1 + M/C) = markup ÷ (1 + markup). The reverse follows the same way.
Conversion table (bookmark this)
| Markup | ↔ Margin | Margin | ↔ Markup | |
|---|---|---|---|---|
| 10% | 9.1% | 10% | 11.1% | |
| 20% | 16.7% | 20% | 25.0% | |
| 25% | 20.0% | 25% | 33.3% | |
| 30% | 23.1% | 30% | 42.9% | |
| 33.3% | 25.0% | 33.3% | 50.0% | |
| 50% | 33.3% | 40% | 66.7% | |
| 100% | 50.0% | 50% | 100.0% | |
| 200% | 66.7% | 60% | 150.0% |
Memory tricks
- Cost basis → price basis: “divide the markup by one plus itself”
- Price basis → cost basis: “divide the margin by one minus itself”
- Two anchors: markup 100% = margin 50%; margin 25% = markup 33.3%
Don’t memorize — calculate
The markup calculator ships with the full conversion table: enter cost plus either rate and get price, profit, and the other rate instantly. To see whether your margin is healthy for your sector, check the industry average margin table.