Markdown Calculator — Retail Price Reduction
A markdown reduces the selling price of a product below its original retail price. Enter the original and sale prices to find the markdown percentage, or enter a markdown percentage to find the resulting sale price.
Calculate
Percentage of original price that was deducted
- 1
Markdown amount
100 − 75 = 25 - 2
Markdown percentage
25 ÷ 100 × 100 = 25
How does this calculator work?
Markdown percentage = (Original Price − Sale Price) ÷ Original Price × 100. To reverse it: Sale Price = Original × (1 − Markdown% ÷ 100). Enter either pair of values to solve for the third. A 25% markdown on a $100 item means a $75 sale price and a $25 markdown amount.
Formula
How this is calculated
A markdown is the absolute dollar (or currency) reduction from a product's original price to its selling price, typically expressed as a percentage of the original. The markdown percentage is simply (Original Price − Sale Price) ÷ Original Price × 100. For example, a shirt originally priced at $80 and put on sale for $60 has a $20 markdown, which equals 25% of the original price.
The reverse calculation — finding the sale price from a markdown percentage — multiplies the original price by (1 − Markdown/100). A 30% markdown on a $100 item gives a sale price of $70.
Markdown differs from markup: markup is calculated on cost price (how much the retailer paid), while markdown is calculated on the selling price the customer sees. Retailers use markdowns to clear inventory, respond to competition, or run seasonal promotions. Note that the markdown percentage is always relative to the original price, not the cost, so a product can still be profitable even at a significant markdown if the original price included a healthy margin.
Frequently asked questions
In practice the terms are often used interchangeably, but technically a markdown is a permanent reduction in the listed selling price, while a discount is a temporary price reduction, often applied at the point of sale. Both are calculated the same way as a percentage of the original price.
Markup is calculated on the cost price — the amount the retailer paid for the item — and determines the original selling price. Markdown is calculated on that original selling price to produce a lower sale price. A 40% markup followed by a 40% markdown does not return you to the original cost; the markdown percentage is applied to a larger number.
Yes, and it often happens during clearance sales. When a markdown brings the sale price below the retailer's cost, the resulting sale incurs a loss. Retailers accept this to recover some value from slow-moving or perishable inventory.
Also known as
TG we-Calculate Editorial Team. (2026). Markdown Calculator — Retail Price Reduction [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/markdown-calculator
TG we-Calculate Editorial Team. "Markdown Calculator — Retail Price Reduction." TG we-Calculate. 2026. https://we-calculate.com/calculator/markdown-calculator.
TG we-Calculate Editorial Team, "Markdown Calculator — Retail Price Reduction," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/markdown-calculator
@misc{wecalculate_markdown_calculator, title = {Markdown Calculator — Retail Price Reduction}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/markdown-calculator}}, year = {2026}, note = {TG we-Calculate} }
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