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The classic mix-up, solved. No signup. ·
Markup and margin describe the same money from two directions. Markup is profit compared to cost; margin is profit compared to price. A 50% markup on a $10 dish is a $15 price — but that same dish only has a 33.3% margin, because $5 of profit is a third of $15.
The mix-up is expensive: a owner who asks for "50% margin" but prices with a 50% markup pockets a third, not a half. Whichever number your bookkeeper reports, make sure the kitchen and the spreadsheet mean the same thing.
| Markup | Margin | Price on a $10 cost |
|---|---|---|
| 25% | 20% | $12.50 |
| 50% | 33.3% | $15.00 |
| 75% | 42.9% | $17.50 |
| 100% | 50% | $20.00 |
Keep going with these tools — they build on this calculation: Menu Pricing Calculator, Food Cost Percentage Calculator, Restaurant Profit Margin Calculator and Restaurant Break-Even Calculator. When your prices look right, print the menu with the Menu Maker — free templates, PDF & PNG. Want us to set the whole system up for you? Ask about concierge setup.
Use whichever your trade speaks. Restaurants and bars usually talk food cost percentage, which is margin language (food cost % = 1 − margin). Suppliers quote markup. Know both, price once.
Doubling your cost adds a profit equal to the cost (100% markup), but that profit is half of the final price, because price = cost + profit. Margin is always smaller than markup for the same sale.
On individual dishes, margins of 65–72% (a 28–35% food cost) are typical. Net profit for the whole restaurant is far thinner — usually 3–9% — after labor, rent and overhead.