Margin and markup calculator
This margin calculator works out the sell price, gross profit, margin and markup from your cost. Enter a cost and either the margin you want, the markup you want or the price you sell at, and it shows all four figures. It works for products, services and hourly rates, including labour hire charge rates.
Updated 12 November 2026 · Uses 2026-27 figures
Calculate margin, markup and sell price
Enter your cost, choose what you know, then enter the margin %, markup % or sell price.
General information only, not financial, tax or legal advice. Results are estimates based on 2026-27 figures and the assumptions shown. Check your award, agreement or a qualified adviser for your situation.
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Get a quote Call 0477 567 567How to use the margin calculator
- Enter your cost price. For services, use the cost per hour, such as pay plus on-costs.
- Choose what you know: the margin %, the markup % or the sell price.
- Enter that number.
- Read the sell price, gross profit, margin and markup. The calculator also shows the profit on 38 units, which is a 38-hour week for an hourly rate.
How to calculate margin
Margin is profit as a share of the sell price. Markup is profit as a share of the cost. Both start from the same gross profit.
| What you want | Formula |
|---|---|
| Gross profit | Sell price − cost |
| Margin % | Gross profit ÷ sell price × 100 |
| Markup % | Gross profit ÷ cost × 100 |
| Sell price from a margin | Cost ÷ (1 − margin %) |
| Sell price from a markup | Cost × (1 + markup %) |
A common mistake is to add the margin percentage to the cost. Adding 20% to a cost of $100 gives $120, which is a 20% markup but only a 16.7% margin. To earn a 20% margin you need to sell at $125.
Worked example
A cost of $42.00, with a target margin of 20%.
Sell price = $42.00 ÷ (1 − 0.20) = $52.50. Gross profit is $10.50. The margin is 20% and the markup is 25%. On 38 units, such as a 38-hour week, the profit is $399.
If you instead applied a 20% markup to the same $42.00 cost, the sell price would be $50.40, the profit $8.40 and the margin only 16.7%.
Margin vs markup conversion table
| Margin | Equivalent markup |
|---|---|
| 10% | 11.1% |
| 15% | 17.6% |
| 20% | 25% |
| 25% | 33.3% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100% |
To convert a margin to a markup: markup = margin ÷ (1 − margin). To convert a markup to a margin: margin = markup ÷ (1 + markup).
What is gross profit margin?
Gross profit margin is gross profit divided by revenue, usually across a whole business or product line. It shows how much of each dollar of sales is left after direct costs, before overheads like rent, wages for admin staff and marketing. Net profit margin goes further and takes out all costs and tax.
Contribution margin
Contribution margin is the sell price minus variable costs only. It shows how much each sale contributes to covering fixed costs. In a staffing business, for example, the variable cost of an hour of labour includes pay, super, payroll tax and workers comp.
Margins in labour hire
A labour hire charge rate is a cost plus a margin. The cost is the worker's pay with casual loading, 12% super, payroll tax and workers comp. The agency margin pays for recruitment, payroll, insurance, compliance and profit. Some agencies quote a markup on cost rather than a margin on price, so check which one you are comparing. The labour hire charge rate calculator shows each layer, and TQN Personnel can provide a labour hire quote broken down the same way.
Frequently asked questions
How do you calculate profit margin?
Subtract the cost from the sell price to get gross profit, then divide gross profit by the sell price and multiply by 100. For example, a product that costs $42 and sells for $52.50 has $10.50 profit and a 20% margin.
What is the difference between margin and markup?
Margin is profit as a percentage of the sell price. Markup is profit as a percentage of the cost. They describe the same profit, but markup is always the higher number. A 20% margin is a 25% markup.
How do I calculate a sell price from a margin?
Divide the cost by one minus the margin. For a 30% margin on a $70 cost, the sell price is $70 ÷ 0.70 = $100. Adding 30% to the cost would give $91, which is only a 23% margin.
How do you calculate gross profit margin?
Take revenue minus the cost of goods or services sold, divide by revenue and multiply by 100. It is usually measured over a period, such as a month or a financial year, across all sales.
What is a good profit margin?
It depends on the industry. Businesses with high volume and low overheads can run on thin margins, while specialist services need higher margins to cover overheads. Compare your margin with past results and with businesses like yours.
What is contribution margin?
Contribution margin is the sell price minus the variable costs of each unit or hour. It shows how much each sale contributes towards fixed costs and profit, which helps with pricing and break-even planning.
What is the formula for markup?
Markup is gross profit divided by cost, multiplied by 100. If an item costs $80 and sells for $100, the profit is $20 and the markup is 25%. To set a price from a markup, multiply the cost by one plus the markup, so a 25% markup on $80 gives $100.
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Sources and assumptions
General information only, not financial, tax or legal advice. Results are estimates based on 2026-27 figures and the assumptions shown. Check your award, agreement or a qualified adviser for your situation.