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Profit Margin Calculator
Calculate gross profit, profit margin percentage and markup for any product or service pricing.
About This Calculator
Profit margin and markup are essential metrics for pricing products and measuring business profitability. Margin measures profit as a percentage of revenue. Markup measures profit as a percentage of cost. Understanding both helps you price competitively while maintaining profitability.
How to Use This Calculator
- 1Enter the cost price (what you paid or spent to produce it)
- 2Enter the selling price (what you charge the customer)
- 3Click Calculate to see profit, margin, and markup
Formula Used
Profit Margin = (Selling − Cost) / Selling × 100 | Markup = (Selling − Cost) / Cost × 100
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FAQ
Frequently Asked Questions
Common questions about the profit margin calculator answered.
What is the difference between margin and markup?+
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. For the same transaction, markup is always higher than margin. Example: Buy for $100, sell for $150 — Margin = 33.3%, Markup = 50%. Both describe the same $50 profit differently.
What is a healthy profit margin by industry?+
Margins vary widely by industry. Software and SaaS companies often achieve 70-90% gross margins. Retail averages 2-5%. Manufacturing is 5-10%. Restaurants are 3-9%. Professional services achieve 15-35%. Compare your margin to industry benchmarks rather than a universal standard.
How do I set a selling price to achieve a target margin?+
To achieve a target gross margin: Selling Price = Cost / (1 − Target Margin%). For a 40% margin on a $60 cost item: $60 / (1 − 0.40) = $60 / 0.60 = $100 selling price. Our calculator shows both margin and markup for any cost/selling price combination.
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