Markup Calculator
The selling price from a cost and a markup — or from a target margin — and the two ratios side by side, with GST added at the deeper level.
Markup is profit over cost; margin is profit over price.
How the markup calculator works
Markup is profit over cost; margin is profit over price. A 50% markup on a $10 cost gives a $15 price, which is a 33.3% margin. To hit a margin, price = cost ÷ (1 − margin). GST (10%) is added to the ex-GST price when the item is sold inc-GST.
Formula: Price = Cost × (1 + markup) · Price = Cost ÷ (1 − margin) · Margin = Profit ÷ Price
How markup pricing is worked out
Price = cost × (1 + markup %)
Markup is what you add to the cost to get the price. Add 50% to a $10 item and it sells for $15; add 100% and it sells for $20. The formula is selling price = cost × (1 + markup %), and the dollars you add are the gross profit. The trap is the word next to the percentage: markup is profit ÷ COST, while margin is profit ÷ PRICE. Same profit, different denominator — and because the price is always bigger than the cost, the markup number is always the bigger one. That's the classic retail mix-up, and it's why "I'm on 50%" can mean two very different businesses.
To go the other way and hit a target margin, use markup = margin ÷ (1 − margin). A 50% margin needs a 100% markup — doubling the cost, known as 'keystone' pricing. Do all of this ex-GST and add 10% for the ticket: the GST you collect isn't your profit, it goes to the ATO. And remember markup gives you gross profit — before rent, wages and everything else.
Worked example
A $10 item at 50% markup sells for $15 — a $5 profit. Measure that $5 against the cost and it's the 50% markup you entered; measure it against the $15 price and it's a 33.3% margin. If you actually wanted to keep half of every sale, a true 50% margin needs doubling the cost to $20 — a 100% markup. That single step is where most pricing spreadsheets quietly lose a third of the expected profit.
Markup isn't your profit. It gives gross profit only — rent, wages, power, freight and shrinkage all still come out of it. Use it alongside your profit margin and break-even numbers, not on its own.
Markup vs marginMarkup vs margin — the conversion table
Both describe the same dollars of gross profit. Markup divides by the cost; margin divides by the price. Convert with margin = markup ÷ (1 + markup) and markup = margin ÷ (1 − margin). The common pairs:
- 25% markup → 20% margin. Buy at $10, sell at $12.50, keep $2.50.
- 50% markup → 33.3% margin. Buy at $10, sell at $15, keep $5. The pair people get wrong most often.
- 66.7% markup → 40% margin. Buy at $10, sell at $16.67.
- 100% markup → 50% margin. Keystone — double the cost to $20.
- 150% markup → 60% margin. Buy at $10, sell at $25.
- 233% markup → 70% margin. Buy at $10, sell at $33.33.
Notice the gap widens as you climb: at a 20% margin the two numbers are close, but chasing a 70% margin takes a markup more than three times the size. Margin can never reach 100% — you'd need an infinite markup — while markup has no ceiling. If someone quotes you a percentage and it matters, ask which one they mean before you price to it.
GST, keystone & real profitGST, keystone pricing and what markup doesn't cover
Where GST fits
Do the markup maths ex-GST, then add 10% at the end for the shelf price. The GST you collect isn't your profit — you remit it to the ATO — so marking up a GST-inclusive cost, or measuring margin against a GST-inclusive price, flatters the number by about a tenth. If you're registered for GST you also claim the credit on what you buy, so your true cost is the ex-GST figure as well. Ex-GST in, markup applied, × 1.1 for the ticket.
Keystone and the usual ranges
Keystone is a 100% markup — double the cost, which lands you on a 50% margin. It's the old retail default because it's fast to apply across a whole range and leaves room for markdowns. Real ranges vary a lot: fast-moving grocery lines often sit well below keystone and make it back on volume, while fashion, giftware and hospitality frequently price above it to absorb discounting and slow stock. Use keystone as a reference, not a rule — your cost base sets the floor and the market sets the ceiling.
Markup gives gross profit, not net
The profit a markup produces is gross profit: sales less the cost of the goods. Everything else — rent, wages, power, freight, payment fees, shrinkage and markdowns — comes out of it afterwards. A healthy markup is necessary but not sufficient, so pair it with a break-even figure and watch what's left at the bottom, not just the top.
Frequently asked Frequently asked questions
Where these figures come from
Markup is a standard pricing and cost-accounting method, not a legislated figure. The formulas here are the mainstream retail ones, with the GST handling set to Australia's 10% goods and services tax.
- Selling price — cost × (1 + markup %); the dollars added are the gross profit.
- Markup ↔ margin — margin = markup ÷ (1 + markup); markup = margin ÷ (1 − margin). A 50% margin needs a 100% markup.
- Price from a target margin — cost ÷ (1 − margin %), worked ex-GST.
- GST — Australia's goods and services tax is 10%; mark up the ex-GST cost, then × 1.1 for the inc-GST ticket price.
- Keystone — the retail convention of doubling the cost: a 100% markup, a 50% margin.
- Further guidance — business.gov.au — Australian government business guidance.
Last checked: July 2026. This is a planning estimate, not financial or tax advice. Markup produces gross profit only — overheads still come out of it. Confirm your GST treatment with your accountant or the ATO.
Understanding your resultSelect the question that matches where you are right now.
The headline number is the selling price your markup produces. The breakdown shows the gross profit in dollars, the margin that markup actually delivers, and the equivalent markup or margin the other way round — so you can see both sides of the same trade.
What to do with itCheck the margin next to the markup. If the margin is lower than you assumed, raise the markup until the margin hits your target — or switch the input to Margin % and let the calculator do it.
What it is notIt's not your net profit. Markup produces gross profit only — rent, wages, freight and shrinkage still come out of it, and it isn't tax advice.
Why GST mattersMark up the ex-GST cost and add 10% for the ticket. Marking up a GST-inclusive figure overstates what you keep, because the GST was never yours.
Three things move the price: what the item costs you, the percentage you add, and which percentage you meant.
Cost priceUse the landed cost — the goods plus freight and any handling, ex-GST if you're registered. An understated cost quietly understates every price built on it.
The percentageMarkup and margin are different questions with different answers. 50% markup is a 33.3% margin; a 50% margin takes a 100% markup. Pick the one you actually mean.
GST & the ticketThe ex-GST price is what you price and report on; the inc-GST price is what the customer sees. Switch between them here — the markup and margin never change, only the display.
A few habits keep markup honest across a whole range, not just one line.
Set targets in marginMargin is the number that hits your P&L, so set the goal in margin and convert to markup for pricing. It stops the 50/33 confusion at the source.
Cost it properlyFreight, duty and payment fees belong in the cost, not the overheads, or your markup looks healthier than it is on every unit you sell.
Price by categoryOne blanket markup across a whole range leaves money on some lines and prices you out of others. Vary it by how the category actually sells.
Markup sets the price. Model what happens after it.
The full marginTurn markup into an overall profit margin.
Profit margin calculator → Cover your costsFind the sales you need to break even.
Break-even calculator → Get the GST rightAdd or strip 10% GST on any figure.
GST calculator → Related calculators 📈Profit MarginMarkup & margin 🧾GST CalculatorAdd or strip 10% 🏷️DiscountWhat a sale costs ⚖️Break-EvenSales to cover costs 🍽️Food Cost %Price the plate 💼Business ValuationWhat it's worth You might also be interested in 📈Profit MarginMarkup & margin 🧾GST CalculatorAdd or strip 10% 🏷️DiscountWhat a sale costs ⚖️Break-EvenCover your costs 🍽️Food Cost %Price the plate 🏦Business LoanFund the stock Rate this calculatorQuick answers
Markup vs margin — the difference Cost-based vs price-based
They measure the same profit against different bases. Markup is profit as a percentage of your COST; margin is profit as a percentage of your selling PRICE. A $10 item sold for $15 has a $5 profit — that's a 50% markup ($5 ÷ $10) but a 33.3% margin ($5 ÷ $15). Markup is always the bigger number. Mixing them up is one of the most common — and costly — retail pricing mistakes.
| Markup | profit ÷ cost |
|---|---|
| Margin | profit ÷ price |
| $10 → $15 | 50% markup / 33% margin |
- Markup Always bigger
- Don't Confuse them
Pricing from cost and markup $10 + 50% = $15
To set a price, multiply cost by one plus the markup: a $10 item at 50% markup is $10 × 1.5 = $15. Retailers often work in 'keystone' (100% markup, i.e. double the cost) or category-standard markups. Whatever you choose, price on your landed cost — including freight and any duty — not just the invoice price, or your real margin is thinner than you think.
| Cost | $10 |
|---|---|
| 50% markup | $15 |
| Keystone (100%) | $20 |
- Price on Landed cost
- Include Freight + duty
What markup gives a 50% margin? 100% markup
If you want to keep half of every sale (a 50% margin), you need to double your cost — a 100% markup. It's counter-intuitive: people assume a 50% markup gives a 50% margin, but a 50% markup only yields a 33.3% margin. The rule of thumb: to hit a target margin, markup = margin ÷ (1 − margin). So 40% margin needs 67% markup, and 60% margin needs 150% markup.
| 50% margin | 100% markup |
|---|---|
| 40% margin | 67% markup |
| 60% margin | 150% markup |
- Formula margin ÷ (1−margin)
- Aim by Margin, price by markup
Where GST fits in Price ex-GST, then +10%
Do your markup maths on ex-GST figures, then add 10% GST for the shelf price. If a $10 (ex-GST) item takes a 50% markup, the ex-GST price is $15 and the ticket price is $16.50. Because you collect that $1.50 GST for the ATO, it's not yours — never include it in your margin. Retailers who mark up on GST-inclusive numbers quietly overstate their profit on every line.
| Ex-GST price | $15 |
|---|---|
| +10% GST | $16.50 |
| GST | Not your profit |
- Work Ex-GST
- Add GST For the ticket
Keystone and standard markups Keystone = 100% (double)
'Keystone' pricing means doubling the cost — a 100% markup, or 50% margin — and it's the traditional retail default because it leaves enough room for discounts, shrinkage and overheads. Real-world markups vary a lot by category: groceries run thin (10–25%), fashion and gifts often 2–2.5× cost, and jewellery or homewares can be much higher. Use keystone as a starting point, then adjust for competition and how fast the stock turns.
| Keystone | 100% markup |
|---|---|
| Groceries | 10–25% |
| Fashion/gifts | 100–150% |
- Fast turn Lower markup ok
- Slow turn Needs more
Markup and your actual profit Gross, not net
The margin from a markup is your GROSS profit — what's left after the cost of the goods, but before rent, wages, power, marketing and shrinkage. A healthy gross margin can still lose money if overheads are high or stock doesn't sell. That's why retailers watch both margin per item AND stock turn (how fast it sells): a lower-margin product that flies off the shelf can out-earn a high-margin one that gathers dust.
| Markup gives | Gross profit |
|---|---|
| Before | Rent, wages, etc. |
| Also watch | Stock turn |
- High margin Not enough alone
- Fast turn Can win
Worked examples
| Inputs | Selling price | Note |
|---|---|---|
| $10 cost with a 50% markup | $15.00 | $15 — a 33.3% margin |
| A 50% margin on a $10 cost | $20.00 | $20 — a 100% markup |
FAQFrequently asked questions
What is the difference between markup and margin?
They're the same dollars of profit measured against different bases. Markup is profit divided by the cost; margin is profit divided by the selling price. Buy at $10, sell at $15, and the $5 profit is a 50% markup (5 ÷ 10) but only a 33.3% margin (5 ÷ 15). Because the selling price is always bigger than the cost, the markup percentage is always the bigger number — which is exactly why the two get mixed up. Quoting a 50% markup and assuming you're keeping half the sale is the classic retail mistake, and it's how a business that looks profitable on paper runs short of cash.
How do I calculate a selling price from cost?
Selling price = cost × (1 + markup %). A $10 item at 50% markup is 10 × 1.5 = $15. At 100% markup it's 10 × 2 = $20. If you'd rather work from a target margin, the formula is selling price = cost ÷ (1 − margin %): a $10 item at a 40% target margin is 10 ÷ 0.60 = $16.67. Do the arithmetic ex-GST, then add 10% at the end if you need the ticket price. This calculator does it either way — enter a markup or a margin and it converts and prices in one step.
What markup gives a 50% margin?
A 100% markup — you double the cost. The formula is markup = margin ÷ (1 − margin), so 0.50 ÷ 0.50 = 1.00, or 100%. Doubling the cost is known as keystone pricing. The same formula gives the rest: a 33.3% margin needs a 50% markup, a 40% margin needs a 66.7% markup, and a 60% margin needs a 150% markup. Notice how fast markup climbs as the target margin rises — the gap between the two numbers widens the higher you go, which is why a 50% markup only ever delivers a 33.3% margin.
How does GST affect markup?
Do the markup maths ex-GST, then add 10% for the ticket. The GST you collect isn't your profit — you remit it to the ATO — so marking up a GST-inclusive cost, or measuring your margin against a GST-inclusive price, overstates what you keep by about a tenth. If you're registered for GST you also claim back the GST on what you bought, so your real cost is the ex-GST figure too. Price ex-GST, apply the markup, then multiply by 1.1 for the shelf price. This calculator shows both, so you can price on the ex-GST number and display the inc-GST one.
What is keystone pricing?
Keystone pricing is doubling the cost — a 100% markup, which produces a 50% margin. It's a long-standing retail rule of thumb because it's easy to apply across a whole range and it leaves enough gross profit to cover rent, wages and markdowns. Plenty of categories sit above or below it: fast-moving grocery lines often run well under keystone on thin margins and high volume, while fashion, giftware and hospitality frequently price above it to absorb discounting and slow stock. Treat keystone as a reference point, not a rule — the market sets the ceiling and your cost base sets the floor. Sources
The sources behind this calculator
- Corporate Finance Institute — EBITDA — why EBITDA is a non-GAAP measure with no single definition
- US SEC — Non-GAAP Financial Measures, Compliance & Disclosure Interpretations — the disclosure rules that exist precisely because EBITDA is not standardised
- Australian Securities and Investments Commission — the Australian corporate regulator
Last checked: July 2026. These are standard management-accounting definitions; where a term has no single agreed definition, the page says so.