Profit Margin Calculator
Turn a cost and a selling price into profit, margin and markup, or work backwards to the price you need for a target margin or markup.
Profit, margin and markup
Enter what the item costs you and what you sell it for.
Selling price for a target margin
Enter your cost and the profit margin you want to earn.
Selling price for a target markup
Enter your cost and the markup you want to add on top.
Margin and markup are not the same
Profit margin is profit as a share of the selling price. Markup is profit as a share of the cost. The same sale gives two different percentages, and mixing them up is the most common pricing mistake. A 50% markup is a 33.33% margin, not 50%.
| Markup | Equivalent margin |
|---|---|
| 25% | 20% |
| 50% | 33.33% |
| 100% | 50% |
Profit margin formulas
Profit = Selling price − Cost
Profit margin = Profit ÷ Selling price × 100
Markup = Profit ÷ Cost × 100
Selling price for a target margin = Cost ÷ (1 − Margin ÷ 100)
Selling price for a target markup = Cost × (1 + Markup ÷ 100)
Worked examples
| Situation | Working | Result |
|---|---|---|
| Cost 60, sold for 100 | Profit 40. 40 ÷ 100 and 40 ÷ 60 | Margin 40%, markup 66.67% |
| Cost 70, target margin 30% | 70 ÷ (1 − 0.30) | Sell at 100.00 |
| Cost 50, markup 40% | 50 × 1.40 | Sell at 70.00, margin 28.57% |
What this calculator does not include
These figures are gross margin: selling price minus the cost you enter. They do not subtract overheads such as rent, wages, shipping, payment fees or tax. For a realistic price, include those costs in the cost box.
Frequently asked questions
What is a good profit margin?
It depends heavily on the industry and the business model, so compare against similar businesses rather than a single target number.
Can a profit margin be negative?
Yes. If the selling price is below the cost you make a loss, and the calculator shows a negative margin and the size of the loss.
Why must a target margin be below 100%?
A 100% margin would need a zero cost. Mathematically, the price needed for a margin of 100% or more does not exist, so the calculator asks for a value below 100.
Should I use margin or markup?
Either works as long as you know which one you are using. Many sellers set prices with markup, while financial statements usually report margin.
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Results are for general information only. The calculators are tested, but please double-check anything important before relying on it for financial, tax, legal or medical decisions.