Profit Margin Calculator

Calculate profit margin, markup, and selling price instantly. Real-time results with visual breakdown.

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0%
Margin
Cost
Profit
Gross Profit Revenue minus Cost of Goods. The absolute dollar amount you earn before other expenses.
$0.00
Markup Markup is the profit as a percentage of cost. Formula: (Profit ÷ Cost) × 100. A 50% margin = 100% markup!
0%
Revenue Breakdown
0% Cost + 0% Profit

Understanding Profit Margin Formulas

Gross Margin

((Revenue - Cost) / Revenue) × 100

Shows what percentage of each sale is profit. A 40% margin means you keep $0.40 of every $1 in revenue.

Markup Percentage

((Revenue - Cost) / Cost) × 100

Shows how much you've increased the cost. A 100% markup means you doubled the cost to get the selling price.

Selling Price from Margin

Cost / (1 - Margin%/100)

Calculate the required selling price when you know your cost and desired margin percentage.

Frequently Asked Questions

Margin is profit expressed as a percentage of the selling price (revenue), while Markup is profit expressed as a percentage of the cost. For example, if you buy a product for $50 and sell it for $100: the margin is 50% (profit $50 ÷ revenue $100), but the markup is 100% (profit $50 ÷ cost $50). Margin is always less than markup for the same transaction.

Use the formula: Selling Price = Cost ÷ (1 - Margin%/100). For example, if your cost is $60 and you want a 40% margin: $60 ÷ (1 - 0.40) = $60 ÷ 0.60 = $100 selling price. You can also use our calculator by selecting "Solve for: Revenue" mode, entering your cost and desired margin.

Profit margins vary significantly by industry. Retail typically sees 2-5% net margins, while software companies can achieve 20-40%+. For gross margins specifically: grocery stores average 25-30%, restaurants 60-70%, and software 80-90%. Compare your margin to industry benchmarks and focus on consistency and improvement over time.

Markup to Margin: Margin = Markup ÷ (1 + Markup). Example: 50% markup = 0.50 ÷ 1.50 = 33.3% margin.
Margin to Markup: Markup = Margin ÷ (1 - Margin). Example: 25% margin = 0.25 ÷ 0.75 = 33.3% markup. Our calculator automatically shows both values so you don't need to convert manually.