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Profit margin calculator

Compare margin and markup or find a selling price for a target margin.

Unit economics
40.00%
Gross margin on selling price
Profit per unitUSD 40.00
Markup on cost66.67%
CostUSD 60.00ProfitUSD 40.00

Profit = selling price − cost. Margin = profit ÷ selling price × 100. Markup = profit ÷ cost × 100.

Two decimal places; no conversion.

Two decimal places for money. Profit can be negative; cost and price cannot.

Processed on your device

How it works & useful details

Formula & assumptions

Profit is selling price minus the cost you enter. Margin divides profit by selling price; markup divides it by cost. Zero denominators are undefined. Target mode rounds the price UP to cents to reach at least the chosen margin below 100%; target mode requires a positive cost. This is gross unit pricing, excluding costs and taxes you have not included.

Local planning workspace

These tools are planning aids, not financial, tax or legal advice. Values stay in this page. Nothing is sent, saved to your records or fetched from external services.

USD, EUR, GBP, CAD and AUD are labels with two decimal places. There is no currency conversion. Enter decimals with a dot and no commas. Money inputs are limited to 1 billion units; calculated amounts to 10 trillion. Rates are supplied by you, with up to four decimal places.

About this tool

Profit margin calculator relates cost, price, margin, and markup in one place. Enter a cost and a selling price to see the margin and markup, or ask what price you need for a target margin.

Because margin and markup are easy to confuse, both are shown side by side with the underlying amounts. The calculation is local and only uses the values you type.

How to use it

  1. Choose whether you want to solve for margin, markup, or a target price.
  2. Enter the cost and the known price or target margin.
  3. Review margin, markup, profit, and the adjusted price.
  4. Copy the breakdown for a quote or pricing note.

Worked example

An item costs 60.00 and sells for 100.00. The profit is 40.00. The margin is 40.00 ÷ 100.00 = 40%, and the markup is 40.00 ÷ 60.00 = 66.67%. It is the same profit, measured against different bases.

In target mode, an item that costs 45.00 and needs a 35% margin must sell for 45.00 ÷ (1 − 0.35) = 69.2307…, which is rounded up to 69.24. At that price the margin is 35.01% and the markup is 53.87%. Rounding up guarantees the margin is at least the target.

The margin vs. markup mistake

A common pricing error is adding the target margin as a markup. Adding 35% to a cost of 45.00 gives 60.75, but that price only produces a 25.9% margin. Margin can never reach 100%, because that would require a cost of zero. Markup has no upper limit.

  • Use margin when you talk about the share of revenue you keep, which is how most financial reports express it.
  • Use markup when you price from cost, which is common in retail and trades.
  • To convert, margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin).

Frequently asked questions

What is the difference between margin and markup?

Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. A 50% margin equals a 100% markup.

Can I price for a target margin?

Yes. Enter the cost and the margin you want, and the tool calculates the selling price needed to reach it.

Does it include fees or taxes?

No. Include payment fees or taxes in your cost figures if you want them reflected in the result.