Profit Margin Calculator
Profit, gross margin and markup from cost and price.
Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. The two numbers are always different for the same sale — see the FAQ below.
How to use the Profit Margin Calculator
- 1 Choose whether you know the revenue, or want to hit a target margin.
- 2 Enter the cost, and either the revenue or your target margin percentage.
- 3 Read the profit, gross margin and markup.
Examples
- ▸ Cost 60, revenue 100 → 40 profit, 40% margin, 66.7% markup.
- ▸ Cost 60, target margin 35% → sell at 92.31.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price (profit ÷ revenue). Markup is profit as a percentage of the cost (profit ÷ cost). They use the same profit figure but different denominators, so they are never equal — markup is always higher than margin for the same sale.
How do I calculate the price needed for a target margin?
Divide the cost by (1 − target margin ÷ 100). For a 35% margin on a 60 cost item, that is 60 ÷ 0.65 = 92.31 — pricing at 60 cost and 40% markup would be a common mistake, since that only gives a 28.6% margin.
Why is my margin lower than my markup?
Because margin divides by the (larger) selling price while markup divides by the (smaller) cost. A 50% markup on a 100 cost item sells for 150, giving a profit of 50 — that’s only a 33.3% margin (50 ÷ 150), not 50%.
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