Profit Margin Calculator

Find your margin, markup and selling price from cost and revenue or a target margin.

How to Use This Profit Margin Calculator

Choose a mode. Enter your cost and either the selling price or a target margin. The calculator returns your profit, margin percentage and markup percentage, or the price you should charge.

I know the selling price — computes margin and markup from actual revenue.
I know my target margin — computes the price you need to charge for a given margin.
Margin — profit as a percentage of price.
Markup — profit as a percentage of cost.

Practical Example

Suppose a product costs $50 and sells for $80:

Profit = $80 − $50 = $30
Margin = $30 ÷ $80 = 37.5%
Markup = $30 ÷ $50 = 60%

To hit a 40% margin instead, set the price at $50 ÷ (1 − 0.40) = $83.33.

What Your Results Mean

Profit — revenue minus cost.
Margin — the percentage of each sales dollar that is profit.
Markup — the percentage added to cost to reach the price.

Frequently Asked Questions

What is the difference between margin and markup?

Margin is profit divided by selling price; markup is profit divided by cost. A 40% markup is only about a 28.6% margin, so the two are easy to confuse.

How do I set a selling price for a target margin?

Divide the cost by (1 − margin). For a 40% margin on a $50 cost, price = 50 ÷ 0.60 = $83.33.

What does margin tell me about my business?

Margin shows how much of each dollar of revenue is profit. It is the metric lenders and investors watch to judge profitability.

Can margin exceed 100%?

Margin cannot reach 100% because profit is always less than price. Markup, however, can exceed 100% — it has no upper bound.

What margin should a business target?

It varies by industry. Grocers may run on a few percent while software can exceed 80%. Compare with your industry norms.