Profit Margin Calculator
Margin (profit margin) measures profitability as percentage of selling price. Formula: Margin = (Price - Cost) / Price × 100. Different from markup: Markup = (Price - Cost) / Cost × 100. For example, $100 item with $60 cost has 40% margin but 66.7% markup. To calculate selling price from cost and margin: Price = Cost / (1 - Margin%). For 40% margin on $60 cost: $60 / 0.60 = $100. Margin is always less than markup for the same dollar profit.
Calculate profit margin, markup, and selling price. Find margin percentage from cost and revenue, or set prices based on desired margin.
What do you want to calculate?
Cost
$
Profit Margin %
%
Common Margins
Profit Margin
25%
Profit as % of revenue
Markup
33.33%
Profit as % of cost
Cost
$100.00
Profit
$33.33
Revenue
$133.33
Revenue Breakdown
75%
25%
Cost Profit
Margin vs Markup
- Margin: Profit ÷ Revenue × 100 (profit as % of selling price)
- Markup: Profit ÷ Cost × 100 (profit as % of cost)
- 25% margin = 33.3% markup
- 50% margin = 100% markup
- Margin is always lower than markup for the same profit
How to Use
- Enter your value in the input field
- Click the Calculate/Convert button
- Copy the result to your clipboard
Frequently Asked Questions
- What is profit margin?
- Profit margin is profit as a percentage of revenue. Margin = (Revenue - Cost) / Revenue × 100. If you sell for $100 with $60 cost: Margin = $40/$100 = 40%. Shows how much of each dollar of sales is profit.
- What is the difference between margin and markup?
- Margin = Profit/Revenue. Markup = Profit/Cost. Same profit, different denominators. 25% margin ≠ 25% markup. $100 cost, $133.33 price: Margin = 25% (33.33/133.33), Markup = 33.3% (33.33/100). Markup is always higher.
- How do I convert margin to markup?
- Markup = Margin / (1 - Margin). 25% margin = 0.25/(1-0.25) = 0.25/0.75 = 33.3% markup. Reverse: Margin = Markup / (1 + Markup). 50% markup = 0.5/1.5 = 33.3% margin.
- What is a good profit margin?
- Varies by industry. Retail: 2-5% net margin. Software: 20-30%. Luxury goods: 10-20%. Grocery: 1-3%. Restaurants: 3-9%. Gross margin (before operating costs) is higher than net margin. Compare within your industry.
- How do I calculate selling price from cost and desired margin?
- Selling price = Cost / (1 - Margin). For 30% margin on $70 cost: Price = $70 / 0.70 = $100. Verify: ($100-$70)/$100 = 30% margin. Common mistake: adding margin to cost gives markup, not margin.