Markup vs Margin Calculator

Confused about markup and margin? You're not alone — many SA business owners mix them up, leading to pricing mistakes. This tool explains both and calculates either.

Enter your cost price and selling price to find the markup percentage.

Cost Price (R)

Selling Price (excl. VAT) (R)

Markup %
–
on cost price

Gross Margin %

–

on selling price

Gross Profit

–

per unit

Selling Price incl. VAT

–

at 15% VAT

Enter your cost price and desired margin percentage to find your selling price.

Cost Price (R)

Desired Gross Margin (%)

Selling Price (excl. VAT)
–

Selling Price (incl. VAT)

–

at 15% VAT

Markup %

–

on cost price

Gross Profit

–

per unit

Enter your cost price and desired markup percentage to find the selling price.

Cost Price (R)

Desired Markup (%)

Selling Price (excl. VAT)
–

Selling Price (incl. VAT)

–

at 15% VAT

Gross Margin %

–

on selling price

Gross Profit

–

per unit

Markup vs Margin: What's the Difference?

This is one of the most common sources of confusion for SA business owners — and getting it wrong can mean selling at a loss without realising it.

Markup = (Selling Price − Cost) ÷ Cost × 100 Margin = (Selling Price − Cost) ÷ Selling Price × 100

The key difference: markup is calculated on cost, while margin is calculated on selling price. A 50% markup and a 50% margin are NOT the same thing.

Worked Example

Scenario	Cost Price	Selling Price	Markup %	Margin %
Example A	R100	R150	50%	33.3%
Example B	R100	R167	67%	40%
Example C	R100	R200	100%	50%
Example D	R200	R500	150%	60%

⚠️ The Classic Mistake: "I want a 50% margin, so I'll add 50% to my cost price." Wrong! Adding 50% to cost gives you a 33.3% margin — not 50%. To achieve a 50% margin, you must double your cost price (100% markup).

Typical Margins by Industry in SA

Industry	Typical Gross Margin
Software / SaaS	60–80%
Professional Services (consulting, accounting)	40–60%
Retail (general)	25–45%
Restaurants & Food	65–70% (food cost ~30-35%)
Wholesale / Distribution	15–30%
Construction	10–20%
Manufacturing	20–35%

VAT Reminder for SA Businesses

If your business is VAT-registered, remember that the 15% VAT you charge your customers is not revenue — it belongs to SARS. Always calculate your markup and margin on the ex-VAT price. Pricing on the VAT-inclusive amount will erode your actual margin by approximately 13%.

Which Should I Use: Markup or Margin?

Use markup when you know your cost price and want to consistently price products (e.g., retail: "I always mark up 40% on cost")
Use margin when benchmarking against industry standards or tracking business performance (financial reports use margin)
Both are valid — just be consistent and know which you're using