The Agency Markup Calculator converts project cost and markup into a selling price, then shows the profit margin produced by that markup. It helps prevent a common pricing error: treating markup and margin as if they were the same percentage.
Enter the total cost to be recovered and the markup percentage applied to that cost. The calculator reports selling price, gross profit, and the resulting margin on revenue. It is useful for vendor pass-throughs, production work, and simple cost-plus quotes, although a complete agency price may also need overhead, risk, and value considerations.
1. Enter the cost base
Use the full cost amount to which the markup will be applied.
2. Set the markup percentage
Enter the percentage of cost added to form the selling price.
3. Review the selling price
The result includes both recovered cost and markup profit.
4. Check the resulting margin
Use this figure when comparing the quote with margin targets.
Selling price = Cost × (1 + Markup rate)
Gross profit = Selling price − Cost
Profit margin (%) = Gross profit ÷ Selling price × 100
Markup is measured against cost, while margin is measured against selling price. A 40% markup therefore produces a margin of approximately 28.57%, not 40%.
The selling price is the cost-plus amount generated by the selected markup.
A negative markup represents a discount below cost and can produce a loss.
Given: Total cost of $10,000 and a 40% markup.
Calculation: Selling price = $10,000 × 1.40 = $14,000. Gross profit = $4,000. Margin = $4,000 ÷ $14,000 × 100 = 28.57%.
Result: A 40% markup produces a $14,000 price and a 28.57% margin.
No. Markup divides profit by cost, while margin divides profit by selling price.
Yes, down to -100%. This models a selling price below cost and therefore a loss.
Include overhead when the cost base is intended to recover it; otherwise the displayed profit may overstate economic profit.
Use a margin-based price estimator because the required markup rises nonlinearly as the target margin increases.
Yes, when contracts permit a cost-plus treatment and the cost amount is known.