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Profit Margin Calculator - Margin & Markup Calculator

Free profit margin calculator to calculate gross profit margin, markup percentage, and profit from cost and revenue. Essential for business pricing.

Profit Margin Calculator

Calculate profit margin, markup, and pricing

Select what information you have.

$

Your cost to produce or acquire the item.

$

The price you sell the item for.

%

The profit margin percentage you want.

Margin Analysis

Enter your values to see results

and click the "Calculate" button

What is Profit Margin?

Profit margin is the percentage of revenue that remains after covering costs. It shows how much profit you make for every dollar of sales. A 30% profit margin means you keep $0.30 as profit for every $1.00 in revenue. Profit margin is crucial for pricing decisions, comparing profitability across products, and understanding your business's financial health.

How to Use This Calculator

  1. Select what information you have
  2. Enter your cost (what you pay for the item)
  3. Enter your revenue/selling price
  4. Click Calculate to see margin and markup
  5. Use results to optimize your pricing

Profit Margin Formulas

Profit Margin = (Revenue - Cost) / Revenue × 100

Markup = (Revenue - Cost) / Cost × 100. Key difference: Margin is based on selling price, Markup is based on cost. A 50% markup ≠ 50% margin.

Frequently Asked Questions

What's the difference between margin and markup?
Margin is profit as % of revenue (selling price). Markup is profit as % of cost. Example: Cost $70, Price $100. Margin = 30% ($30/$100). Markup = 43% ($30/$70). Same profit, different percentages!
What's a good profit margin?
It varies by industry. Retail: 2-5% net margin. Software: 20-30%. Luxury goods: 50%+. Service businesses: 15-25%. Compare to industry averages. Higher margin = more cushion for expenses and profit.
How do I calculate selling price from cost and desired margin?
Selling Price = Cost / (1 - Margin%). Example: Cost $70, want 30% margin. Price = $70 / (1 - 0.30) = $70 / 0.70 = $100.
What's the difference between gross and net margin?
Gross margin = (Revenue - Cost of Goods) / Revenue. Net margin = (Revenue - ALL Expenses) / Revenue. Gross margin ignores overhead, taxes, etc. Net margin is your true bottom-line profitability.
Why is my margin lower than my markup?
Margin is always lower than markup (unless 0%). Margin divides by the larger number (revenue), markup divides by smaller number (cost). 50% markup = 33% margin. 100% markup = 50% margin.
How do I increase profit margin?
Raise prices (if market allows), reduce costs (better suppliers, efficiency), eliminate low-margin products, focus on high-margin items, reduce discounts, improve operational efficiency.

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