EN

Profit Margin Calculator: Margin, Markup and Selling Price

Enter cost and selling price to see profit, margin and markup, or enter a target margin to find the price you need to charge.

Calculator

From cost and price

$
$
$

Shipping, packaging, fees. Added to the cost above.

Profit$40.00
40%Gross margin
66.67%Markup

Price for a target

%
Selling price needed$85.71using cost $60.00

Price you need for common margins

Target marginSelling price neededMarkup
10%$66.6711.1%
20%$75.0025%
30%$85.7142.9%
40%$100.0066.7%
50%$120.00100%

Based on the total cost above (cost + other costs).

Amounts are in USD (United States selected). Change country or currency in the header. Exchange rates are approximate, from a static table updated 2026-10-25 — not live and not for transactions.

Estimates for planning only. Not tax or financial advice. Last verified: 2026-10-25

Profit margin calculator: how it works

Profit is revenue minus cost. Margin and markup both describe profit as a percentage, but they divide by different things. Margin divides profit by the selling price, so it says how much of each unit of sales you keep. Markup divides profit by cost, so it says how much you add on top of what you paid.

Enter a cost and a selling price to get profit, margin and markup. Or enter a cost and a target margin to find the price that achieves it. Because margin is based on price, the price for a target margin is cost ÷ (1 − margin), not cost × (1 + margin), which is a common pricing mistake.

Use it when you are pricing a new product, checking whether a supplier's price rise hurts you, or comparing a quote with your costs. Seeing margin and markup together prevents the common mix-up where a seller adds 30% to cost and then expects a 30% margin.

Formula and assumptions

Formula

  • Profit = revenue − cost
  • Margin % = profit ÷ revenue × 100
  • Markup % = profit ÷ cost × 100
  • Price for target margin = cost ÷ (1 − margin%)

Assumptions

  • Margin is calculated on revenue; markup on cost.
  • Costs are per unit and exclude tax unless you include them in the cost.

Worked example

Cost 600, selling price 800

  1. Profit = 800 − 600 = 200.
  2. Margin = 200 ÷ 800 = 25%.
  3. Markup = 200 ÷ 600 = 33.3%.
  4. To reach a 40% margin on the same cost: price = 600 ÷ (1 − 0.40) = 1,000.

Result: A 25% margin equals a 33.3% markup; hitting 40% margin needs a price of 1,000.

Limitations

  • This is gross margin per unit. It does not include overheads, salaries, rent, advertising, or tax.
  • Costs are per unit and exclude sales tax unless you include it. Do not mix tax-inclusive prices with tax-exclusive costs.
  • A margin cannot reach 100% for a product with a cost, but markup can exceed 100%.
  • Average margins differ widely between industries; there is no universal "good" number.

Frequently asked questions

What is the difference between margin and markup?

Margin = profit ÷ price; markup = profit ÷ cost. A 50% markup is a 33.3% margin, and a 100% markup is a 50% margin.

How do I price a product for a target margin?

Divide the cost by one minus the margin as a decimal. For a 30% margin on a cost of 70, the price is 70 ÷ 0.7 = 100.

What is a good profit margin?

It depends on the business: grocery retail often has low single-digit net margins, while software can have very high ones. Compare with your own sector rather than a single figure.

Is gross margin the same as net margin?

No. Gross margin only subtracts the direct cost of the product. Net margin also subtracts all other expenses and taxes.

Can margin be negative?

Yes. If the price is below cost, profit and margin are negative and you are selling at a loss.

How do I calculate profit margin percentage?

Subtract cost from price, divide by price and multiply by 100. With a cost of 600 and a price of 800, profit is 200 and margin is 200 ÷ 800 = 25%. Dividing by cost instead gives markup, which is 33.3% for the same numbers.

Can profit margin be over 100%?

No. Margin is profit divided by price, and profit cannot be larger than the price unless the cost is negative, so margin tops out just below 100%. Markup, which divides by cost, can go above 100%: a cost of 50 and a price of 150 is a 200% markup but a 66.7% margin.

Sources

Calculator data last verified: 2026-10-25. Estimates for planning only; not tax or financial advice.

What next?

Disclosure:We may earn a commission.We may earn a commission if you sign up through links in this section. This never changes the price you pay and does not affect our calculators.

Related calculators