Profit Margin vs Markup: What Is the Difference & How to Calculate Both

Published: 2026-02-08 | Read Time: 4 min read

Understand why a 50% markup equals only a 33.3% profit margin, and how confusing the two metrics destroys business profitability.

Frequently Asked Questions

Can profit margin ever exceed 100%?

No. Profit margin is a percentage of total revenue and cannot exceed 100%. Markup, however, can be 200%, 500%, or more.