Business Margin

Margin ↔ markup

Percentage

That figure is a

Converted 100 %

markup = margin ÷ (1 − margin)

Margin 50 %

Markup 100 %

Multiply cost by 2×

Or divide price by 0.5

markup = margin ÷ (1 − margin)

The conversion table

Margin	Markup	Multiplier
10%	11.1%	1.111×
15%	17.6%	1.176×
20%	25%	1.250×
25%	33.3%	1.333×
30%	42.9%	1.429×
33.3%	50%	1.500×
40%	66.7%	1.667×
50%	100%	2.000×
60%	150%	2.500×
66.7%	200%	3.000×
75%	300%	4.000×

Markup equals margin divided by one minus the margin. A 50% margin is a 100% markup; a 33.3% margin is a 50% markup; a 20% margin is a 25% markup. The two only coincide at zero.

How to convert margin and markup

1 Enter the percentage you have.

2 Say whether it is a margin or a markup.

3 Read the other one, plus the multiplier to apply to cost.

4 Use the table for the values you meet most often.

The multiplier column is the practical output. Rather than converting percentages every time, a shop that wants a consistent 40% margin can simply multiply every ex-VAT cost by 1.667 and be done. That single number is easy to apply, easy to check, and does not invite the margin-markup confusion at all. It also makes a price list trivially auditable — every line should be cost times the same figure, and anything that is not stands out.

Questions

How do I convert margin to markup? −

Divide the margin by one minus the margin. A 0.4 margin gives 0.4 ÷ 0.6 = 66.7% markup.

How do I convert markup to margin? +

Which is always larger? +

What multiplier gives a 50% margin? +

Can margin exceed 100%? +

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