How to use Profit Margin & Markup Calculator
- Choose what you know: cost and selling price, cost and desired margin, or cost and desired markup.
- Enter the numbers.
- Read the margin, markup, profit and selling price.
About this tool
Profit margin is profit as a share of the selling price: (price − cost) ÷ price. Markup is profit as a share of the cost: (price − cost) ÷ cost. The same sale has a higher markup than margin, so the two should never be mixed up. For example, an item that costs 40 and sells for 65 has a profit of 25: a margin of 38.5% and a markup of 62.5%.
To reach a target margin, price = cost ÷ (1 − margin). To reach a target markup, price = cost × (1 + markup). The margin here is the gross margin per item and does not include overheads, tax or discounts. These are estimates for planning and are not accounting, tax or legal advice.
Privacy: This tool runs in your browser. What you type or choose is not sent to a server by this website.
Common questions
What is the difference between margin and markup?
Margin divides the profit by the selling price; markup divides it by the cost. A 50% markup equals a 33.3% margin.
What is a good profit margin?
It depends on the industry. Compare with similar businesses rather than a single number.