What is the difference between margin and markup?

Margin is profit divided by selling price; markup is profit divided by cost. A ₹300 profit on a ₹700 cost sold at ₹1,000 is a 30% margin and a 42.9% markup — the same money, two denominators.

How do I price for a 40% margin?

Divide the cost by 0.6. A ₹600 cost needs a ₹1,000 price. Multiplying by 1.4 gives ₹840, which is a 40% markup and only a 28.6% margin.

How do I calculate break-even units?

Divide fixed costs by the profit per unit. ₹20,000 of fixed costs against ₹300 per unit means 67 units before you are in profit.

Can markup be more than 100%?

Yes — a ₹100 cost sold at ₹300 is a 200% markup. Margin cannot reach 100%, because that would mean a cost of zero.

Should GST be included in the selling price here?

Use the pre-tax figure. GST is collected on behalf of the government and is not revenue, so including it overstates both margin and profit.

Which costs count as variable?

Anything that changes with each unit sold — materials, commissions, payment fees, packaging, shipping. Rent and salaries are fixed. Getting this split right matters more to the break-even figure than precision anywhere else.

Profit, Margin & Markup Calculator

Margin and markup from the same numbers, side by side — because confusing them is the most expensive arithmetic mistake in small business — plus break-even volume and target pricing.

Runs in your browser — nothing is uploaded

Cost, price and volume

Cost price per unit

₹

Selling price per unit

₹

Units sold

Fixed costs

₹

Rent, salaries, anything you pay regardless of volume

Target percentage%

Used for the pricing suggestion below

Margin

30%

Profit as a share of the selling price

Markup

42.86%

The same profit as a share of cost

These are the same profit described two ways

₹300 on a ₹700 cost sold at ₹1,000 is a 30% margin but a 42.86% markup. Pricing at “40%” means ₹1,167 if you meant margin and only ₹980 if you meant markup — a ₹187 difference on every single unit.

Profit per unit: ₹300
Revenue: ₹1,00,000
Total costIncluding fixed costs: ₹90,000
Net profit: ₹10,000
Break-even volume₹66,667 of revenue covers the fixed costs: 67 units

Pricing for a 40% target

For 40% margin

₹1,167

Profit ÷ selling price

For 40% markup

₹980

Profit ÷ cost price

Why use it

Built to be genuinely useful

Margin and markup together

The same profit described two ways. Pricing at '30%' means ₹1,000 or ₹910 depending which you meant.

Break-even volume

How many units cover your fixed costs at the current price, and the revenue that represents.

Target pricing both ways

The price for a target margin and the price for a target markup, so the difference is impossible to miss.

Free, no sign-up

No account, no usage cap, and no feature held back behind a paywall.

How it works

Three steps

1
Enter your cost price and selling price per unit.
2
Add volume and fixed costs for the break-even figures.
3
Set a target percentage to see what to charge for it.

Margin and markup are not the same, and the gap is money

Margin is profit as a share of the selling price. Markup is the same profit as a share of the cost. On a ₹700 cost sold at ₹1,000, the ₹300 profit is a 30% margin and a 42.9% markup. Same transaction, two numbers, and people use the words interchangeably.

Where it costs money is pricing. Told to work at 30%, someone who multiplies cost by 1.3 charges ₹910 — a 23% margin, not 30%. Getting to a true 30% margin means dividing by 0.7, which is ₹1,000. The ₹90 gap is on every unit sold, and nobody notices until the year-end accounts come in short.

The tool shows both figures from a single input and, in the target section, both prices side by side. That is deliberate: seeing ₹1,000 and ₹910 labelled clearly is more useful than any explanation of the difference.

Break-even is about fixed costs, not profit per sale

Contribution per unit — selling price minus variable cost — is what pays down your fixed costs. Break-even is simply fixed costs divided by that contribution: the point where the rent and the salaries are covered and further sales start producing profit.

This is why raising price and cutting cost are not equivalent moves even when they change profit per unit identically. A price rise may reduce volume; a cost reduction usually does not. The break-even figure tells you how much volume you can afford to lose before a price rise stops being worth it.

If the selling price is below cost, there is no break-even at any volume. The tool says so rather than printing a large number, because that is the finding.

The margins that are not there

Cost price is easy to understate. Payment gateway fees, marketplace commissions, packaging, returns, shipping subsidies and the cost of holding stock are all real and are all routinely left out of the cost figure — which makes the margin look healthy on a spreadsheet and thin in the bank.

A useful discipline is to compute margin twice: once on the invoice cost, and once on everything that varies with the sale. The second number is the one that scales.

FAQ

Questions people ask

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