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Profit Margin Calculator
Enter what an item costs you and what you sell it for. You get the profit, the margin, the markup and the prices needed for other margins.
| Target margin | Selling price | Profit |
|---|---|---|
| 20% | $50 | $10 |
| 30% | $57.14 | $17.14 |
| 40% | $66.67 | $26.67 |
| 50% | $80 | $40 |
| 60% | $100 | $60 |
Example
Selling for $65 something that costs $40 makes $25 of profit. That is a margin of 38.5% and a markup of 62.5%.
How the profit margin calculator works
Margin is profit as a share of the selling price: margin = (price − cost) / price. Markup is profit as a share of the cost: markup = (price − cost) / cost.
The two are easy to confuse. A 50% markup is a 33.3% margin, and a 50% margin needs a 100% markup.
To find the price for a target margin, divide the cost by one minus the margin. For a 40% margin on a cost of 40, the price is 40 divided by 0.6.
Common questions
What is the difference between margin and markup?
Both use the same profit. Margin divides it by the selling price and markup divides it by the cost, so markup is always the larger number.
Is this gross margin or net margin?
It is gross margin if you enter only the direct cost of the item. Net margin also deducts overheads such as rent, wages and tax.
What is a good profit margin?
It varies by industry. Grocery shops work on a few percent, while software and luxury goods can exceed 70%. Compare with businesses like yours.