Profit Margin Calculator

Enter cost and selling price to instantly see gross margin %, markup %, and profit or loss amount.

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Margin vs Markup

Gross Margin % = (Selling Price − Cost) / Selling Price × 100. Markup % = (Selling Price − Cost) / Cost × 100. Margin is always lower than markup for the same price.

Gross Margin

Gross Margin Markup
10%11.1%
20%25%
30%42.9%
40%66.7%
50%100%

How to use?

  1. 1
    Enter Cost Enter the total cost of producing or purchasing the item.
  2. 2
    Enter Selling Price or Target Margin Either enter your selling price or set a target gross margin percentage.
  3. 3
    See Results Instantly view profit amount, gross margin %, and markup %.

FAQ

What is the difference between margin and markup?
Margin is profit divided by selling price; markup is profit divided by cost. A 50% markup equals a 33.3% margin. Confusing the two leads to pricing errors.
What is a good profit margin?
It depends on the industry. Retail typically targets 20–50% gross margin. Software can exceed 70%. Grocery is often below 5%. Always compare within your sector.
How do I set a selling price from a desired margin?
Use Mode 2. Enter cost and target margin %. The calculator finds the selling price using: Selling Price = Cost / (1 − Margin / 100).

What is Gross Profit Margin?

Gross profit margin measures how much of each sales dollar remains after covering the cost of goods sold. Formula: Gross Margin % = (Revenue − Cost) / Revenue × 100. A 40% margin means 40 cents of every dollar is profit before operating expenses.

Margin vs Markup

Margin and markup both describe profit, but from different perspectives. Margin divides profit by the selling price; markup divides profit by the cost. A 25% markup results in a 20% margin. Retail and wholesale industries often use markup; finance teams prefer margin.

How to Price for a Target Margin

To find the selling price that delivers a specific margin: Selling Price = Cost ÷ (1 − Target Margin). For a 30% margin on a $70 cost item: 70 ÷ 0.70 = $100. This ensures the margin is calculated correctly relative to the selling price, not the cost.

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