Separate margin on price from markup on cost

Profit = price − cost. Margin = profit / price (percent of the selling price). Markup = profit / cost (how much you “mark” cost to get price). A 50% margin means profit is half the price, so cost is the other half: price is double cost, and markup is then 100%, not 50%.

Profit = prix − coût

Marge = profit / prix

Marque = profit / coût

Two basic accounting ratios on a single cost and a single price. Whether your “cost” is wholesale, fully loaded, or with freight is your choice; the price must use the same convention. No inventory layers, no overhead allocation, no volume. ROI uses invested capital as the denominator, which need not equal this unit cost. A later discount changes margin after the fact; this tool does not compute the discount, it observes a known cost/price pair.

Cost

Markup’s denominator. Cost 0 is rejected. It need not be catalog wholesale; it is whatever you set against price.

Selling price

Margin’s denominator. Unit price or line revenue, one amount, no separate quantity field.

Assumptions

• One cost and one price, same convention (both pretax or both with tax, same currency).
• No inventory or allocated overhead.
• Cost and price strictly positive.

Limits

• Does not solve for a target price at a required margin (it starts from a known price).
• Ignores sales tax, year-end rebates, and freight not in the typed cost.
• Not a company profitability diagnosis and not tax advice.

Quote “40% margin” only if you mean profit over price. Quote “67% markup” if you mean profit over cost. Using the wrong word with a buyer or a cost-plus contract is how bids go sideways. ROI on the $40 versus some other capital outlay is yet another ratio.

• Calling a 50% add-on to cost a 50% margin.

  That add-on is markup. Margin on that deal is 33.3% in the $80 → $120 example.

• Comparing margin to ROI as if the denominator matched.

  ROI divides by capital invested. Margin divides by price.

• DiscountApply one markdown: the original times (1 − p/100). Stacked percents off are not a sum: 20% then 20% leaves 64% of list, a 36% combined cut, not 40%.
• ROIROI here is a simple ratio of gain (or loss) to cash put in. It does not know whether the outcome took a month or a decade. CAGR is the tool that uses years.
• Bill splitTotal, headcount, optional tip. Everyone pays the same share of bill + tip.
• TipFrom a bill and a percent, get the tip, the grand total, and an even per-person share. In many US full-service restaurants people leave about 18–20% of the check; that is a custom, not a legal minimum, and not a rating of the meal.
• Hourly to salaryThree numbers: hourly rate, weekly hours, paid weeks. The tool returns the week, the calendar month (year / 12) and the year.
• Sales tax / VATOne amount and one rate. The tool either adds tax (net → gross) or extracts it (gross → net) and shows the tax slice.

Written by Rédaction HexaCalc (editorial team). Content last updated: August 25, 2026. No third-party medical or financial review is claimed.

This calculation uses a standard mathematical identity. See also the methodology.