Profit Margin Calculator
Find your profit, margin percentage, and markup percentage from a cost and selling price.
Margin vs markup — they're not the same
Margin is profit as a percentage of the selling price: Margin = (Revenue − Cost) ÷ Revenue × 100.
Markup is profit as a percentage of the cost: Markup = (Revenue − Cost) ÷ Cost × 100. The two numbers are always different (except at 0% profit) — confusing them is a common pricing mistake.
Worked example
An item costing 60 sold for 100 makes a profit of 40. That's a margin of 40 ÷ 100 = 40%, but a markup of 40 ÷ 60 ≈ 66.67% — the same 40 profit expressed two different ways.
Margin and markup side by side
These pairs all come from a selling price of 100:
- Cost 80: profit 20, margin 20%, markup 25%.
- Cost 75: profit 25, margin 25%, markup 33.33%.
- Cost 50: profit 50, margin 50%, markup 100%.
Pricing for a target margin
To hit a target margin, divide the cost by one minus the margin. For a cost of 80 and a 25% margin, the price is 80 ÷ 0.75 = 106.67, which is a markup of 33.33%. A common mistake is to add 25% to the cost instead: 80 plus 25% makes 100, which is only a 20% margin.
Zero cost
If the cost is zero, margin is 100% but markup can't be calculated, so the calculator shows n/a for markup instead of a meaningless number.
More worked examples from the tool
Cost 45.50 and selling price 79.99 give a profit of 34.49, a margin of 43.12% and a markup of 75.80%. Cost 8.40 and price 12.00 give 3.60 profit, 30.00% margin and 42.86% markup. Cost 250 and price 1,000 give 750.00 profit, a margin of 75.00% and a markup of 300.00%, which shows that markup can pass 100% while margin never can.
Rounding happens only at the end, to two decimals. Cost 99.99 and price 149.99 give 50.00 profit, a 33.34% margin and a 50.01% markup.
Losses and break-even
Selling below cost is accepted. A cost of 120 with a price of 100 shows a profit of -20.00, a margin of -20.00% and a markup of -16.67%. Selling at cost, 100 for 100, gives 0.00, 0.00% and 0.00%. The selling price has to be greater than zero, and the cost cannot be negative.
Converting between the two
- Markup = margin ÷ (1 − margin). A 25% margin is a 33.33% markup, and 40% becomes 66.67%.
- Margin = markup ÷ (1 + markup). A 100% markup is a 50% margin, and 300% becomes 75%.
Frequently asked questions
Which one should I use when pricing a product?
Markup is usually more useful when deciding what price to charge starting from a known cost. Margin is usually more useful when analysing profitability as a share of sales revenue, which is why both are shown here.
Does this include taxes or other expenses?
No — this is a simple cost-vs-revenue comparison. It doesn't account for taxes, shipping, platform fees, or overhead unless you fold those into your 'cost' figure yourself.
Can margin ever be above 100%?
No, because profit cannot exceed the selling price when cost is zero or more. The highest margin is 100%, at zero cost. Markup has no ceiling, for example 300% on a cost of 250 sold at 1,000.
What does it show if I sell below cost?
Negative figures. A cost of 120 and a price of 100 give a profit of -20.00, a margin of -20.00% and a markup of -16.67%.