Markup Calculator
Calculate the selling price from a cost and markup %, or work out the markup % from a cost and selling price.
Reviewed by Richard Ross · Last updated April 2026
How Markup Calculator works
What is markup?
Markup is the amount added to a cost price to arrive at a selling price, expressed as a percentage of the cost. Formula: Selling Price = Cost × (1 + Markup% ÷ 100). Example: a £50 cost with a 40% markup gives a selling price of £70.
Markup vs margin
Markup % is calculated as profit ÷ cost. Margin % is calculated as profit ÷ selling price. They are related: Margin = Markup ÷ (1 + Markup). A 40% markup corresponds to a 28.6% margin. A 50% margin requires a 100% markup.
Common markup rates
Keystone markup (100%) is common in retail — doubling the cost to set the selling price. Professional services often target 2–3× cost (100–200% markup). Wholesale typically uses lower markups of 20–50%. The right markup depends on your industry, volume, and operating costs.
UK pricing context: VAT and markup
When setting prices in the UK, VAT-registered businesses must decide whether to quote prices inclusive or exclusive of VAT. B2B pricing is typically quoted net (ex-VAT) because business buyers can reclaim VAT. B2C pricing must be shown inclusive of VAT under Consumer Rights Act regulations. A product with a £40 cost and 75% markup has a net selling price of £70. If VAT-registered at the standard rate, the consumer-facing price would be £84.
Worked example: UK wholesaler to retailer
A UK wholesaler buys a product for £12 per unit. They apply a 50% markup to reach a trade (ex-VAT) price of £18 per unit. The retailer then applies their own 80% markup to reach a consumer price of £32.40 ex-VAT, or £38.88 including 20% VAT. The wholesaler's gross margin is 33.3%; the retailer's gross margin on their buying price is 44.4%. Both are before operating costs.
Source: HMRC — VAT on business sales and purchases (gov.uk/vat-businesses). Consumer Rights Act 2015 — pricing and disclosure requirements (legislation.gov.uk).
Frequently asked questions
What is a 50% markup?
A 50% markup means you add 50% of the cost to the cost price. A £100 cost with 50% markup gives a selling price of £150. The gross profit margin on that sale is 33%, not 50%.
How do I convert markup to margin?
Margin = Markup ÷ (1 + Markup). So a 40% markup (0.40) gives a margin of 0.40 ÷ 1.40 = 28.6%. Use this calculator to convert instantly.
What markup do I need for a 30% margin?
Markup = Margin ÷ (1 − Margin). For a 30% margin: 0.30 ÷ 0.70 = 42.9% markup. You need to mark up by 42.9% to achieve a 30% gross margin.
Should I use markup or margin?
Margin is more useful for financial reporting and understanding profitability, since it reflects the percentage of revenue that is profit. Markup is more useful when setting prices from a known cost.
How does markup relate to VAT in the UK?
Apply markup to the net (ex-VAT) cost price to get your net selling price, then add VAT on top. Never include VAT in your cost when calculating markup, as this will distort your margin calculations. If you are VAT-registered and buy goods with VAT, use the ex-VAT cost as your starting point.
What is a typical markup in UK retail?
UK retail markup varies widely by category. Fashion and homewares often target 150–300% (keystone and above). Groceries are much lower at 10–30%. Electronics typically fall in the 20–50% range due to thin distributor margins. Compare your markup against gross margin targets: enough must remain after operating costs to generate profit.
What markup percentage should I use?
The right markup depends on your target margin, competitive pricing, and cost structure. If you need a 40% gross margin, you need a 66.7% markup. If competitors sell at a fixed market price, work backwards from that price and your costs to see if the margin is acceptable. Service businesses often use higher markups (100-200%) to cover overhead and labour. Retail markups vary widely: fashion 100-200%, grocery 20-50%, electronics 10-30%.
Why do retailers use keystone markup?
Keystone markup — doubling the wholesale cost to set the retail price (100% markup, 50% margin) — is a simple and widely used rule of thumb in retail. It is easy to apply consistently across a large product range and provides a rough benchmark for acceptable margins. However, it does not account for product-specific competition, demand elasticity, or varying holding costs. High-volume, low-margin items and premium or niche products often require pricing above or below keystone.
How does markup affect VAT calculation?
Markup is applied to your cost to set your selling price, then VAT is added on top of the selling price. For example: cost £50, 100% markup = £100 selling price, plus 20% VAT = £120 customer pays. VAT is always calculated on the net selling price, not the cost. If you set an all-inclusive price and need to extract the net figure, divide by 1.2 (for standard rate VAT).
Is markup the same in every currency or market?
No. Markup percentages need to be adjusted when entering different markets with different cost structures, purchasing power, tariffs, and competitive dynamics. Export pricing often uses a lower markup if freight and duties significantly increase total cost. In markets with higher price sensitivity, a lower markup may be needed to hit a competitive price point, even if this compresses margins.
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