Profit Margin Calculator
Enter your cost and selling price to get gross profit, profit margin percent and markup percent instantly. Built for pricing decisions in any business.
What profit margin tells you
Profit margin is the share of each sale you keep after covering the cost of the product. You work it out by dividing gross profit by the selling price. A 60 percent margin means 60 cents of every dollar stays in the business before other expenses. Margin is the number to watch when you set prices, because it shows how much room you have for overhead and profit.
Margin is not markup
People mix these up and it costs them money. Markup compares profit to cost, while margin compares profit to price. A product that costs 40 dollars and sells for 100 has a 150 percent markup but only a 60 percent margin. If you price off markup but report on margin, your numbers will not match. This calculator shows both so you always know which one you are looking at.
How to use it
Enter your cost per unit and your selling price. You get the gross profit in dollars, the margin as a percent of price, and the markup as a percent of cost. Change either input to test a new price and see the margin move. To set a price from a target markup instead, use the Markup Calculator.
Frequently Asked Questions
How do you calculate profit margin?
Subtract cost from selling price to get gross profit, then divide that profit by the selling price and multiply by 100. The tool does this for you.
What is a good profit margin?
It depends on your industry. Retail often runs thin margins near 20 to 30 percent, while software can exceed 80 percent. Compare against others in your field.
What is the difference between margin and markup?
Margin is profit divided by price. Markup is profit divided by cost. The same profit gives a higher markup percent than margin percent.
Is this calculator free?
Yes. It is free, needs no signup and runs in your browser.