Margin vs markup — the difference
Both use the same profit, but divide it by different numbers:
- Margin = Profit ÷ Selling price × 100 — how much of every ₹100 you sell is profit.
- Markup = Profit ÷ Cost × 100 — how much you added on top of your cost.
Example: you buy an item for ₹80 and sell it for ₹100. Profit is ₹20. Margin is 20 ÷ 100 = 20%, but markup is 20 ÷ 80 = 25%. Mixing the two up is one of the most common reasons shops think they earn more than they do.
How to price for the margin you want
Selling price = Cost ÷ (1 − Margin ÷ 100).
Example: cost ₹80 and you want a 30% margin → ₹80 ÷ 0.70 = ₹114.29. (Adding 30% to the cost gives only ₹104 — a 23% margin.)
Where does GST fit in?
Work out margin on the price before GST. The GST you collect is the government's money, not profit. The calculator shows the final price with GST separately — use the GST calculator for the tax split.
Know your real margin on every item
A single calculation helps with one item. In a shop with hundreds of items, costs change every week — and margins quietly shrink. Tracking the cost of every item or recipe, and seeing profit on every bill, is the only way to know which items really earn money.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. Buying at ₹80 and selling at ₹100 is a 20% margin but a 25% markup.
How do I find the selling price for a 30% margin?
Divide the cost by 0.70. For a cost of ₹80, the price is ₹80 ÷ 0.70 = ₹114.29 before GST.
Should I include GST when calculating margin?
No. Calculate margin on the price before GST. GST collected from customers is paid to the government and is not your profit.
Is this calculator free?
Yes — free, no signup, and it works on your phone.