Profit Margin Calculator
Margin, markup & profit from cost and price
Pricing a product? Enter your cost and selling price to see your profit, margin and markup — the numbers you need to price with confidence.
Margin vs. markup (they're not the same)
Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. A 50% markup is only a 33% margin — confusing the two is a classic pricing mistake that quietly kills profit.
Converting between the two
To turn a target margin into the markup you apply at the till: a 40% margin needs about a 67% markup; a 50% margin needs a 100% markup (doubling the cost). If you price by adding a fixed markup to cost, check what margin it actually leaves after fees and discounts — that's the number that pays your bills.
The costs hiding behind the margin
The margin here is gross margin — price minus the direct cost of the item. Your net profit also has to cover overhead like rent, payroll, marketing and payment processing. A healthy gross margin can still net a loss if overhead is high, so price with enough cushion to cover everything, not just unit cost.
Profit Margin Calculator: frequently asked questions
What's the difference between margin and markup?
Margin = profit ÷ price; markup = profit ÷ cost. The same dollar profit gives a smaller margin % than markup %.
What is a good profit margin?
It depends on the industry — retail often runs 5–20%, software far higher. Compare within your sector.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup). A 50% markup is a 33% margin; a 100% markup (doubling cost) is a 50% margin. They describe the same dollar profit against different bases.