Margin Calculator
Find your profit margin, markup, and profit amount from cost and selling price.
Margin vs. Markup
These two terms get mixed up constantly because they measure the same profit against two different bases. Margin divides profit by the selling price (revenue); markup divides profit by the cost. That distinction matters a lot at higher numbers — a 100% markup only produces a 50% margin.
margin % = ((price − cost) ÷ price) × 100
Example: an item that costs $40 and sells for $60 has $20 of profit. That's a 33.3% margin (20 ÷ 60) but a 50% markup (20 ÷ 40) — the same dollar profit expressed two different ways.
Setting prices from a target margin? Rearrange the formula to price = cost ÷ (1 − target margin ÷ 100).
Frequently Asked Questions
How do you calculate profit margin?
Subtract the cost from the selling price to get profit, then divide profit by the selling price and multiply by 100. This gives gross profit margin as a percentage of revenue.
What is the difference between margin and markup?
Margin is profit divided by the selling price, while markup is profit divided by the cost. The two use different denominators, so a 50% markup is not the same as a 50% margin.
What is a good profit margin?
It varies widely by industry. Retail often runs 20-50% gross margin, software can exceed 70%, while grocery and wholesale businesses often operate on margins under 10%.