Profit Margin Calculator
Find the profit, the profit margin and the markup from a cost and a selling price, or work backwards: the price you need to charge to reach a target margin or markup, or the highest cost you can afford for a given margin.
Result
Enter the cost and the selling price.
The calculation runs in this browser tab. Nothing you enter is uploaded, saved or logged.
What is the difference between margin and markup?
Profit is the selling price minus the cost. Margin and markup both express that profit as a percentage, but of different amounts. The profit margin is the profit as a share of the selling price. The markup is the profit as a share of the cost. For a cost of 60 and a price of 100, the profit is 40, the margin is 40 ÷ 100 = 40%, and the markup is 40 ÷ 60 = 66.7%.
Mixing them up is a classic and expensive mistake. A 50% markup does not give a 50% margin: a cost of 60 marked up by 50% sells for 90, a profit of 30, which is a margin of only 33.3%. Because the margin uses the larger number as its base, it is always smaller than the markup, and it cannot exceed 100%, while a markup can.
How to use the Profit Margin Calculator
- Choose what you know: cost and price, cost and a target margin, cost and a target markup, or price and a target margin.
- Enter the amounts and percentages asked for. Percentages are in %, for example 40 for 40%.
- Read the main result, then the cost, selling price, profit, margin and markup together.
- Use Copy result to copy the main figure, or Reset to start again.
Formula
- Profit
- profit = selling price − cost
- Margin
- margin = profit ÷ selling price × 100
- Markup
- markup = profit ÷ cost × 100
- Price for a margin
- price = cost ÷ (1 − margin ÷ 100)
- Price for a markup
- price = cost × (1 + markup ÷ 100)
Converting between them: markup = margin ÷ (100 − margin) × 100, and margin = markup ÷ (100 + markup) × 100. A 25% margin is a 33.3% markup, and a 20% markup is a 16.7% margin.
Money is rounded to the cent first, and the profit is the difference of the rounded amounts, so the cost, price and profit shown always add up.
Worked example
A product that costs 60 and sells for 100. These are the results the calculator gives:
| Question | Result |
|---|---|
| Input: What do you know? | Cost and selling price: find the profit, margin and markup |
| Input: Cost | 60 |
| Input: Selling price | 100 |
| Profit | 40.00 |
| Cost | 60.00 |
| Selling price | 100.00 |
| Profit | 40.00 |
| Profit margin (profit ÷ selling price) | 40.00% |
| Markup (profit ÷ cost) | ≈ 66.67% |
Assumptions and limits
- This is a gross profit margin: only the cost you enter is deducted. It does not include overheads, tax, shipping, discounts or payment fees unless you add them to the cost.
- A margin cannot be 100% or more when working out a price, since that would require an infinite price; the calculator asks for a smaller margin.
- If the selling price is below the cost, the profit is negative and the page says it is a loss.
- Percentages that do not end are rounded to two decimals and marked ≈.
Frequently asked questions
How do I calculate profit margin?
Subtract the cost from the selling price to get the profit, divide it by the selling price and multiply by 100. For a cost of 60 and a price of 100: 40 ÷ 100 = 40%.
What is the difference between margin and markup?
Margin is profit divided by the selling price; markup is profit divided by the cost. For the same sale the markup is always the larger number, so a 50% markup is a 33.3% margin.
How do I find the selling price for a target margin?
Divide the cost by 1 minus the margin. For a cost of 60 and a 40% margin: 60 ÷ 0.60 = 100. Do not multiply the cost by 1.40, which gives a markup, not a margin.
How do I find the selling price for a target markup?
Multiply the cost by 1 plus the markup. A 50% markup on a cost of 60 is 60 × 1.5 = 90.
What is a good profit margin?
It depends entirely on the industry and the business model: some retailers work on single-digit margins and sell large volumes, while software or luxury goods can have much higher margins. Compare with similar businesses.
Can a profit margin be negative?
Yes. If the selling price is below the cost, the profit and the margin are negative, which means a loss on each sale.