Spreadsheet Practice

How to convert markup to margin and back in Excel

Formula (Excel and Google Sheets)

=B2/(1+B2)

Margin is markup divided by 1 plus the markup: =B2/(1+B2). To go back, markup is =margin/(1-margin).

Result on the example
one result per row in C2, filled down to C7
Works in
Every current version
Google Sheets
Same formula

See it work

The formula is already in C2, filled down to C7. Change any input and the result updates, or edit the formula to experiment.

How it works

With a cost of 1, a markup m makes the price 1+m and the profit m. Margin is profit over price, so it is m/(1+m). A 100% markup (doubling the cost) is a 50% margin.

Going the other way, a margin g means the cost is 1-g of the price, so the markup is g/(1-g).

=B2/(1+B2)

Result0.2

  1. B225.0%

    The value in B2.

  2. 1+B21.25

    The + operator adds.

  3. B2/(1+B20.2

    The / operator divides.

In Google Sheets

The same formula works in Google Sheets: =B2/(1+B2). We ran it in Google Sheets mode on the same data and it returns the same results.

Other ways to do it

Each one was run on the same example sheet.

FormulaResultWhen to use it
=1-1/(1+B2)20.0%, 33.3%, 50.0%…The same conversion: one minus the cost's share of the price.

Common mistakes

  • Margin is always smaller than markup for the same product, and it can never reach 100%.
  • Converting markups and then averaging the margins differs from the margin of the combined sales. Use totals for overall margin.

Try it yourself

Same data, empty answer cell. Your formula is graded instantly, then re-checked on changed data, so a typed-in number won't pass.

Convert markup to margin and back

In C2, convert the markup into the equivalent margin, then fill down to C7.

Questions

How do I convert margin to markup?

Divide the margin by 1 minus the margin: =C2/(1-C2). A 40% margin is a 66.7% markup.

Which one should I quote?

Retail and finance usually talk about margin; pricing from cost usually uses markup. Say which one you mean.

Checked by running on 2026-10-30: every formula and result on this page was calculated by the Spreadsheet Practice formula engine, in both Excel and Google Sheets modes.