10 · Calculators

Profit Margin & Markup Calculator

Enter your cost and either the selling price, a target margin or a markup. You’ll get the other figures straight away.

Profit

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How to use the profit margin & markup calculator

  1. Choose what you know besides the cost: the selling price, a margin or a markup.
  2. Enter the cost and that second value.
  3. Read the profit, selling price, margin and markup.

Margin vs. markup

Both compare profit to something, but not the same thing. Margin is profit as a share of the selling price. Markup is profit as a share of the cost. Buying at $60 and selling at $100 is a 40% margin but a 66.7% markup.

Mixing them up is a common pricing mistake: adding a 40% markup to $60 gives $84, which is only a 28.6% margin.

Formulas

Margin
(price − cost) ÷ price × 100
Markup
(price − cost) ÷ cost × 100
Price for a target margin
cost ÷ (1 − margin ÷ 100)

Examples

Cost $60, selling price $100

Profit $40 · margin 40% · markup 66.67%

Cost $60, target margin 40%

Selling price $100

Questions

Is this gross or net margin?

Gross margin: it only considers the cost you enter. Net margin also subtracts overheads such as rent and wages.

Why can’t margin be 100% or more?

Margin is a share of the price, and profit can never be larger than the price itself.

Does it handle a loss?

Yes. If the price is below cost, the profit and margin are negative.