Enter what you charge and what it costs. See your profit, your margin as a percent of price, and the markup on cost.
A profit margin calculator turns a selling price and a cost into the numbers that matter for a business: the profit, the margin as a share of price, and the markup on cost. Margin and markup are easy to confuse, so seeing both side by side keeps your pricing honest.
Margin is profit divided by the selling price; markup is profit divided by the cost. A product that costs 60 and sells for 100 has a 40% margin but a 67% markup on the same 40 of profit. Quoting the wrong one can badly mislead pricing decisions, so it helps to state which measure you mean.
Knowing the margin you need lets you work backward to a price: divide the cost by one minus the target margin. This single-transaction view leaves out overhead, taxes, and fixed costs, so a healthy gross margin is a starting point, not a guarantee of overall profit. Track it across products to see which ones actually carry the business.
Margin is profit as a percent of the selling price; markup is profit as a percent of cost. The same dollar profit gives a lower margin than markup.
It varies widely by industry. Software can run very high margins, while groceries run thin. Compare against peers in your field rather than a single benchmark.
No. This is a gross margin on one transaction. Rent, salaries, taxes, and other fixed costs come out of that margin.
See the exact formula and a worked example on our methodology page.