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Business

Profit Margin Calculator

Find profit margin, markup, and break-even values.

How This Tool Works

The Profit Margin Calculator computes gross profit margin, markup percentage, and selling price from cost and revenue inputs. Margin and markup are frequently confused: margin is profit as a percentage of the selling price; markup is profit as a percentage of cost. A 50% markup on a $100 cost gives a $150 selling price — but that is only a 33.3% margin. To set a price that achieves a specific margin, use: Price = Cost ÷ (1 − Margin%). Knowing your margin is essential for pricing decisions, supplier negotiations, and financial planning.

How to Use

  1. Enter your cost price in field A (what you paid to produce or acquire the item).
  2. Enter your selling price in field B (what the customer pays).
  3. Click Run to see gross profit, margin percentage, and markup percentage.
  4. To find the correct selling price for a target margin: enter cost in A and target margin % in B, then use 'reverse' mode.

Common Questions

What is the difference between margin and markup?

Margin = (Revenue − Cost) ÷ Revenue × 100. Markup = (Revenue − Cost) ÷ Cost × 100. On a $100 cost item selling for $150: margin is 33.3%, markup is 50%. Using the wrong one leads to serious pricing errors.

What is a good profit margin?

It varies widely by industry. Software/SaaS: 70–85% gross margin. Retail: 25–50%. Restaurants: 60–70% gross margin but 3–9% net margin. Manufacturing: 20–40%. There is no universal benchmark.

How do I calculate the price that achieves a 40% margin?

Use: Selling Price = Cost ÷ (1 − 0.40). If cost is $75: $75 ÷ 0.60 = $125 selling price, which yields a 40% gross margin.

Read the full guide →