How the markup calculator works
Last updated 10 November 2026
Many shops price by adding a percentage to cost. That percentage is the markup.
How it works
- Price = cost × (1 + markup).
- Markup = (price − cost) ÷ cost.
Worked example
With the starting figures:
- A cost of R 600.00 with the markup shown gives a price of R 900.00.
- Profit is R 300.00, a margin of 33.3%.
What markup means
Many shops price by adding a percentage to what an item cost them. That percentage is the markup. A cost with a markup of one hundred percent doubles. The calculator works from cost and markup to price, or from cost and price to the markup you are already charging.
Markup is not margin
Markup is measured against cost. Margin is measured against the price. The same sale has two different percentages. For example, a cost marked up by one hundred percent gives a price that is double the cost, and the profit is half of the price, so the margin is fifty percent. The calculator shows both so you do not mix them up.
Typical uses
- Setting shelf prices from supplier costs
- Checking whether a price covers your overheads
- Working out what markup a competitor's price implies
- Comparing products with different costs
VAT and other costs
Set your price first and add VAT afterwards if you are registered. Costs such as delivery, packaging, card fees and wastage belong in the cost, not in the profit. If they are left out, the markup looks bigger than it really is.
Related tools
See the profit margin calculator, the break-even calculator and the discount calculator. Nothing you enter is stored.
A worked idea
Say an item costs a certain amount and you add a markup of fifty percent. The price is one and a half times the cost. The profit is half of the cost, which is a third of the price, so the margin is a third. The calculator shows these numbers together, so you can see how a markup you choose becomes a margin you earn.
Choosing a markup
There is no single right markup. It depends on your costs, your competition and what customers will pay. Some products carry a high markup because they sell slowly, and others a low one because they sell in volume. Use the tool to test a few and compare them with your running costs.
Things to watch
- A markup is not the same as the share of the price that is profit.
- Add VAT after you set the price, if you are registered.
See the profit margin calculator. Read the full disclaimer.