Profit Margin Calculator
Know what you really earn on each sale. Enter your cost and selling price to get the profit, the margin and the equivalent markup, or switch modes and enter the margin you want to get the selling price that achieves it. Add a number of units to see totals.
- Runs in your browser
- No sign-up
- Free to use
What the item or service costs you.
To see the total profit for a number of units.
How to use Profit Margin Calculator
- Choose whether to calculate the margin or the price.
- Enter your cost per unit.
- Enter the selling price, or the target margin.
- Optionally enter units for total revenue and profit.
Profit Margin Calculator features
Two directions
Margin from cost and price, or price from cost and target margin.
Margin and markup
Shows both, so you never confuse them.
Losses shown
Prices below cost produce a negative margin and a warning.
Totals
Revenue and profit for any number of units.
Any currency
Formatted in the currency you choose.
Shows the formula
Every result comes with its working.
When to use Profit Margin Calculator
- Pricing a new product.
- Checking whether a discount still leaves a profit.
- Comparing the profitability of products.
- Converting a supplier’s suggested markup into a margin.
Profit Margin Calculator FAQ
What is profit margin?
Profit as a percentage of the selling price: (price − cost) ÷ price. A product that costs 40 and sells for 65 has a profit of 25 and a margin of 38.46%.
How is margin different from markup?
Margin divides profit by the price; markup divides it by the cost. The same 25 profit is a 38.46% margin but a 62.5% markup. Retailers often quote markup, accountants margin.
How do I set a price for a target margin?
Divide the cost by (1 − margin). For a 35% margin on a cost of 40: 40 ÷ 0.65 = 61.54.
Can margin be 100% or more?
No. A 100% margin would need a cost of zero; the calculator limits target margins to below 100%.
Which costs should I include?
For gross margin, the direct cost of the product or service. Overheads such as rent and salaries are covered by the total gross profit; the Break-Even Calculator shows how many sales that needs.
Is net margin the same thing?
No. Net margin subtracts all costs, including overheads, interest and tax, from revenue. This calculator works with whatever cost you enter.
Margin is the number that pays the bills
Revenue is what customers pay; margin is what you keep from each sale to cover everything else. A business with high revenue and thin margins can fail while a smaller one with healthy margins thrives. Knowing the margin of each product is the foundation of pricing.
Margin and markup describe the same profit from different starting points. Markup starts from cost: “we add 60% to what we pay”. Margin starts from price: “38% of what customers pay is profit”. Mixing them up is a common and expensive mistake: a 50% markup is only a 33% margin.
Working backwards from a target margin is the safer way to price. Decide what share of each sale you need to cover overheads and leave a profit, and divide the cost by one minus that share. A price set this way survives discounts and cost increases better than a price set by intuition.
Watch margins when you discount. A 20% discount on a product with a 38% margin removes more than half of the profit on each unit, so sales would need to double to earn the same. Run the numbers before promotions as well as when setting the list price.