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Margin & Markup Calculator
Convert between margin and markup, set a price from either, and see it with GST.
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Result
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Margin is measured against the selling price; markup against the cost. They are not the same number, and confusing them is one of the most expensive routine errors in small business pricing.
The conversion
A 50% markup is a 33% margin. A 50% margin needs a 100% markup. A business that intends 40% margin but applies 40% markup is under-pricing by a wide enough margin to turn a profitable product into a loss-maker at volume.
Which to quote
Margin to an investor or a bank, because it is comparable across businesses. Markup to a supplier or in a costing sheet, because it starts from the cost you control.
Where GST sits
GST is collected on top of your price and passed on, so it does not belong in the margin calculation — unless you quote an all-inclusive price, in which case strip the tax out before checking the margin.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price; markup is profit as a share of the cost. A 50% markup is a 33% margin. Confusing them is one of the most expensive routine errors in small-business pricing.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup). A 100% markup is a 50% margin; a 25% markup is a 20% margin. The calculator shows both for any price you enter.
Should GST be included in the margin?
No. GST is collected on top of your price and passed on, so it is not yours and does not belong in the margin. The exception is an all-inclusive quoted price, where you strip the tax out before checking the margin.
What margin should I target?
It varies widely by sector — retail often runs 20% to 40%, services 40% to 70%. The more useful test is whether contribution covers fixed costs at realistic volume, which the break-even calculator answers.