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Profit Margin Calculator

Calculate profit, margin and markup from cost and price, or find the selling price for a target margin or markup, with quantity and tax.

Price your products with confidence. Enter what an item costs you and what you sell it for, and the Profit Margin Calculator shows the profit per item, the profit margin and the markup. Or start from a target: enter your cost and the margin or markup you want, and it tells you the selling price. Add a quantity to see the total revenue and gross profit, and a sales tax or VAT rate to see what the customer will pay.

Margin and markup are often confused, and mixing them up can wipe out your profit. The calculator shows both side by side and includes a table of selling prices for common margins from 10 to 60 percent, so you can compare at a glance. Works with any currency.

How to use Profit Margin Calculator

  1. Choose what you know: cost and price, cost and target margin, or cost and target markup.
  2. Enter your cost per item and the price or target.
  3. Optionally enter a quantity and a sales tax or VAT rate.
  4. Read the margin, markup, profit and the price table.

Features

  • Profit, margin and markup from cost and price.
  • Selling price for a target margin or markup.
  • Total revenue and gross profit for a quantity.
  • Customer price with sales tax or VAT.
  • Table of prices for common margins with the matching markup.
  • Warning when an item sells at a loss.
  • Any currency; shareable link; runs in your browser.

Margin vs markup

Both compare profit with something else. Margin compares profit with the selling price; markup compares profit with the cost. For an item that costs 40 and sells for 65, the profit is 25, the margin is 25 ÷ 65 = 38.46 percent and the markup is 25 ÷ 40 = 62.5 percent. A 50 percent markup is only a 33.3 percent margin, which is why adding "50 percent" to cost doesn't give a 50 percent margin.

MarginEquivalent markupPrice for a cost of 100
10%11.11%111.11
20%25%125
25%33.33%133.33
33.33%50%150
40%66.67%166.67
50%100%200
60%150%250

The formulas

Profit = price − cost. Margin = profit ÷ price × 100. Markup = profit ÷ cost × 100. To reach a target margin, price = cost ÷ (1 − margin ÷ 100); for a target markup, price = cost × (1 + markup ÷ 100). To convert, markup = margin ÷ (100 − margin) × 100 and margin = markup ÷ (100 + markup) × 100. A margin can never reach 100 percent (that would mean the item cost nothing), while a markup can be any size.

Gross margin and what it covers

This calculator works out gross profit: price minus the direct cost of the item. Your business also has overheads — rent, wages, marketing, payment fees, shipping, returns — that gross profit must cover before there is any net profit. Healthy gross margins vary a lot by industry: grocery shops often work on 20 to 30 percent, clothing and cosmetics retailers on 50 percent or more, and software on 70 percent or more. Include per-item costs like packaging and card fees in your cost for a realistic margin.

Prices with tax

Sales tax and VAT are collected for the government, so they are not part of your profit. Enter the rate and the calculator shows the price the customer pays and the tax per item, while margin and markup stay based on your net price. If you sell in a country where prices are shown including VAT, remember to remove the VAT before calculating your margin — the GST Calculator can do that.

Frequently asked questions

What is the difference between margin and markup?

Margin is profit as a share of the selling price; markup is profit as a share of the cost. The same profit gives a higher markup than margin.

How do I calculate profit margin?

Subtract the cost from the price to get the profit, divide by the price and multiply by 100.

How do I price for a 30% margin?

Divide the cost by 0.7. For a cost of 70, the price is 100.

Can margin be more than 100%?

No. Margin is always below 100 percent. Markup can be more than 100 percent.

What is a good profit margin?

It depends on the industry. Many retailers aim for 30 to 50 percent gross margin, but overheads decide what is enough.

Does it include tax?

Margin and markup are calculated without tax. Enter a tax rate to see the price the customer pays.

Is my data stored?

No. The calculation runs in your browser and your numbers only appear in the page link.

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