Same profit, two ways of quoting it
Margin and markup are not the same number, and that is the entire tool.
Both are “profit as a percentage”. They differ in a percentage of what. Margin is profit over the selling price. Markup is profit over the cost.
Cost ₱100, price ₱150 → 50% markup, 33.3% margin. The same ₱50 of profit, quoted two ways.
Here is the one that ends businesses: you want a 50% margin, so you apply a 50% markup. You have priced at ₱150 when you needed ₱200. You are short a third of your planned gross profit — on every unit, silently, because both numbers are “50%”.
So both are shown side by side here, whichever one you typed.
What they are a percentage of. Margin is profit as a share of the SELLING PRICE. Markup is profit as a share of the COST. Buy at ₱100 and sell at ₱150 and you have a 50% markup and a 33.3% margin — the same ₱50 of profit, quoted two ways. Both are correct; they answer different questions.
100%. Doubling the cost is what produces a 50% margin, because at ₱200 the ₱100 of profit is half the selling price. Applying a 50% markup instead prices the item at ₱150 and leaves you at a 33.3% margin — a third of the gross profit you planned for, gone on every unit. That single confusion is the commonest pricing error there is, which is why this shows both numbers whichever one you type.
Because a 100% margin means the profit equals the selling price, which means the item cost you nothing. Above 100% the price would have to be negative. Margin is a share of the price, so it always sits below 100%. Markup has no such ceiling — a 400% markup is ordinary in some trades, and it works out at an 80% margin.
Margin, if anyone is looking at your books: a profit and loss statement reports gross margin, and comparisons across businesses are made on margin. Markup is the practical one at the counter, because it is what you multiply the cost by. Trouble starts when one person means margin and the other hears markup, and the number is the same either way.
No. Put in whichever figures you are working with — both VAT-inclusive or both VAT-exclusive — and the percentages come out right either way, because they are ratios. Mixing them does not work: a VAT-inclusive price against a VAT-exclusive cost overstates your margin by roughly the VAT rate. Use the VAT Calculator to get both onto the same basis first.
No. Markup is a percentage; profit is pesos. And both are GROSS — this is price minus the cost of the goods, before rent, wages, electricity or tax. A healthy gross margin can still be a loss-making business once the overheads land.
Runs entirely in your browser; nothing is transmitted. These are GROSS figures — price less the cost of goods, before rent, wages, electricity or tax. Keep cost and price on the same VAT basis or the margin will be overstated. Nothing you type here is sent to our servers — the calculation runs entirely in your browser.
