Profit Margin Calculator
Find your profit margin, markup and the selling price you need. Enter your cost and either a price or a target, and the numbers update as you type.
Formula
Margin % = Profit / Selling price x 100
Markup % = Profit / Cost x 100
Price from margin = Cost / (1 - Margin %)
Margin vs markup: what is the difference?
Margin is profit as a share of the selling price. Markup is profit as a share of your cost. A product that costs $40 and sells for $100 has a 60% margin but a 150% markup. Mixing the two up is the most common pricing mistake, and it can leave you with far less profit than you planned.
Example
Cost $40, target margin 40%. Selling price = 40 / (1 - 0.40) = $66.67. Profit is $26.67, which is 40% of the price and about 66.7% markup.
Frequently asked questions
How do I calculate profit margin?
Subtract your cost from the selling price to get profit, then divide the profit by the selling price and multiply by 100. For example, a $100 price with a $40 cost gives $60 profit and a 60% margin.
What is a good profit margin?
It depends on the industry. Many retailers work with 20-50% gross margin, while software and service businesses often aim higher. Compare against your own sector and your fixed costs.
How do I find the selling price for a target margin?
Divide your cost by (1 minus the margin as a decimal). With a $40 cost and a 40% margin target, the price is $40 / 0.60 = $66.67.
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