Markup Rate is a business term used to describe the difference between cost and selling price. It is calculated by dividing your net profit—the difference between your total revenue and total costs—by your total costs. The resulting number is multiplied by 100 to express it as a percentage, which is the markup rate. Put simply, this number tells you how much more you’re charging customers than it costs to make the product or offer the service. It’s an essential metric for keeping track of profits, pricing strategies, and controlling costs.