Great Future · business
Profit margin vs markup
Avoid confusing profit as a share of selling price with markup on cost.
Reviewed 21 September 2026Direct answer
Markup compares profit with cost. Margin compares profit with selling price. The percentages differ even when cost and selling price are unchanged.
Open Profit Margin CalculatorWorked example
A cost of R100 sold for R150 produces R50 profit. That is a 50% markup on cost and a 33.33% margin on selling price.
Limits to check
Gross margin excludes overhead, tax, finance costs and owner compensation unless you include them in the cost model.
Official and primary sources
Related guidance
Keep exploring