Enter your cost and selling price to instantly see profit, profit margin, and markup percentage.
Margin and markup describe the same profit from different angles, and confusing them is a common pricing mistake.
Profit Margin = (Profit ÷ Selling Price) × 100. It tells you what share of each sale is profit.
Markup = (Profit ÷ Cost) × 100. It tells you how much you added on top of your cost.
Example: an item that costs $40 and sells for $100 earns $60 profit — a 60% margin but a 150% markup.
This calculator works out your gross profit margin — the profit left after subtracting the direct cost of a product or service from its selling price. It's the cleanest measure of how profitable an individual sale is. Net margin goes further: it subtracts all business expenses (rent, salaries, marketing, taxes, software) from total revenue. A store can have a healthy 50% gross margin but a thin 5% net margin once overhead is paid. Use gross margin to price products and net margin to judge the overall health of the business.
Margin and markup describe the same dollar of profit from two different angles, and mixing them up is one of the most expensive mistakes in pricing. Markup is calculated on cost; margin is calculated on the selling price. Because the selling price is always larger than the cost, the margin percentage is always lower than the markup percentage for the same sale.
Suppose you want a 40% margin and your cost is $60. If you mistakenly apply a 40% markup, you'd price the item at $84 ($60 × 1.40), giving you only a 28.6% margin — well short of your target. To actually hit a 40% margin, you must price at $100 ($60 ÷ (1 − 0.40)), which is a 66.7% markup. Underpricing like this quietly erodes profits across every sale.
To price a product for a desired margin, use this formula: Selling Price = Cost ÷ (1 − Target Margin). For a 30% target margin on a $70 item, that's $70 ÷ 0.70 = $100. To check your work, plug the cost and price back into the calculator above and confirm the margin reads 30%. This approach guarantees you build the profit you need into the price rather than discovering a shortfall after the sale.
Profit margin is profit divided by selling price, multiplied by 100. First find profit by subtracting cost from the selling price, then divide by the selling price. For an item costing $40 and selling for $100, profit is $60 and the margin is ($60 ÷ $100) × 100 = 60%.
Margin expresses profit as a percentage of the selling price, while markup expresses the same profit as a percentage of the cost. A $60 profit on a $40 cost is a 60% margin but a 150% markup. Margin can never exceed 100%, but markup can.
It depends heavily on the industry. As a rough guide, a 10% net margin is considered average, 20% is good, and 5% or below is low. Gross margins are much higher — retail often runs 20–50%, while software businesses commonly exceed 70%.
No. Because margin is profit as a share of the selling price, the maximum possible margin is 100%, which would mean the item cost you nothing. Markup, by contrast, has no upper limit.
Divide your cost by (1 minus your target margin expressed as a decimal). For a 35% margin on a $52 cost, the price is $52 ÷ 0.65 = $80. Enter that price back into the calculator to verify the margin.