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Markup or Margin? Shop Profit Percentages Explained With a Table

Why a 25% markup is only a 20% margin, a table from 10% to 100% markup, and the price to charge for the margin you want.

By the TurantTools PK team · Updated 28 October 2026 · 2 min read

In a shop, "20% profit" can mean two things: adding 20% to the cost (markup), or keeping 20% of the selling price as profit (margin). They're not the same, and the gap changes your sums over a year.

An item bought for Rs 800

Markup (on cost)Selling priceProfitMargin (on selling price)
10%Rs 880Rs 809.1%
20%Rs 960Rs 16016.7%
25%Rs 1,000Rs 20020%
33.3%Rs 1,067Rs 26725%
50%Rs 1,200Rs 40033.3%
100%Rs 1,600Rs 80050%

A 25% markup gives only a 20% margin, and a 100% markup (double the price) gives 50%.

The other way round: the price for the margin you want

Margin you wantMarkup to addPrice for a Rs 800 item
10%11.1%Rs 889
20%25%Rs 1,000
30%42.9%Rs 1,143
Price = cost ÷ (1 − margin).

For shopkeepers

  • Discounts always come off the selling price, so think in margin.
  • Rent, electricity and wages come out of profit; your margin needs to cover them all.
  • If the price includes sales tax, work out the margin without the tax.
Percentage CalculatorOpen the percentage calculator.

Sources we checked

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