Profit Margin Calculator
Free profit margin calculator. Enter cost and revenue to instantly calculate gross profit, profit margin percentage, and markup for your product or service.
Margin vs markup — what’s the difference?
They’re easy to confuse. Margin is your profit as a percentage of the selling price. Markup is your profit as a percentage of the cost. A product that costs $40 and sells for $100 has a 60% margin but a 150% markup — same dollars, different denominator.
Why it matters for pricing
Pricing from markup is convenient (“cost plus 50%”), but margin is what actually shows up on your income statement. Knowing both helps you set prices that hit a target profit and compare products on equal footing.
Frequently asked questions
What's the difference between margin and markup?⌄
Margin is profit as a percentage of the selling price; markup is profit as a percentage of cost. The same dollar profit gives a higher markup than margin.
What is a good profit margin?⌄
It varies a lot by industry, but many small product businesses aim for a gross margin of 30–50%. Service businesses are often higher.
How do I price for a target margin?⌄
Divide your cost by (1 minus the target margin). For a 40% margin on a $60 cost: 60 ÷ 0.6 = $100 selling price.
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