New Zealand calculator
Markup & Margin Calculator NZ
Convert between markup and gross margin, calculate selling price from a target percentage, and see the gross profit created by your cost and price.
Last reviewed by NZ Calculator:
What is the difference between markup and margin?
Markup measures gross profit against cost. Margin measures gross profit against the selling price. Because they use different denominators, the percentages are not interchangeable.
Calculate markup and margin
Your pricing result
Markup vs margin
| Measure | Formula | Using cost $80 and price $120 |
|---|---|---|
| Gross profit | Selling price − cost | $40 |
| Markup | Profit ÷ cost | 50% |
| Margin | Profit ÷ selling price | 33.33% |
Common margin-to-markup conversions
| Target margin | Equivalent markup |
|---|---|
| 20% | 25% |
| 25% | 33.33% |
| 30% | 42.86% |
| 40% | 66.67% |
| 50% | 100% |
NZ source: Business.govt.nz — pricing workbook.
Frequently asked questions
Are markup and margin the same?
No. Markup is profit as a percentage of cost. Gross margin is profit as a percentage of selling price.
How do I calculate markup?
Markup percentage equals gross profit divided by cost, multiplied by 100.
How do I calculate gross margin?
Gross margin percentage equals gross profit divided by selling price, multiplied by 100.
What markup gives a 20% margin?
A 20% margin requires a 25% markup on cost. The conversion is markup = margin ÷ (1 − margin), when percentages are written as decimals.
What markup gives a 30% margin?
A 30% margin requires about a 42.86% markup on cost.
Is 100% markup a 100% margin?
No. Doubling cost is a 100% markup, but gross profit is half the selling price, so the gross margin is 50%.
Should I calculate prices including or excluding GST?
For business pricing analysis, it is usually clearer to compare cost and selling price on the same GST basis. Do not mix GST-inclusive selling prices with GST-exclusive costs.
Does gross margin equal net profit?
No. Gross margin only reflects the cost used in the calculation. Overheads, wages, finance costs, tax and other expenses can reduce net profit.