Profit Margin Calculator: Margin, Markup & Profit

Price a product too low and you lose money; too high and you lose sales. Profit margin tells you exactly how much of each sale you keep, so you can price with confidence. This guide explains margin, markup and how they differ — a distinction that trips up many sellers. The Profit Margin Calculator turns cost and selling price into margin, profit and markup instantly — free, in your browser, with no sign-up.

How profit margin works

Gross profit is what is left after the cost of an item. Margin expresses that profit as a percentage of the selling price.

The formulas are:

• Profit = selling price minus cost
• Margin percent = (profit / selling price) times 100

The key point is that margin is based on the selling price, not the cost. That is what separates it from markup, which we cover below. A higher margin means you keep more of every dollar a customer pays.

How to use the Profit Margin Calculator

Two inputs, full breakdown:

1. Open the Profit Margin Calculator.
2. Enter the cost of the item.
3. Enter the selling price.
4. Read your gross profit, margin percentage and markup percentage.
5. Adjust either value to see how price changes affect margin.

It recalculates live, so you can find the price that hits a target margin in seconds.

Worked example: cost 60, price 100

You buy an item for 60 and sell it for 100.

Work out profit and margin:

• Profit = 100 minus 60 = 40
• Margin = 40 / 100 times 100 = 40%

So your profit is 40 and your margin is 40%. You keep 40 cents of every dollar of revenue. In the next section we calculate the markup on the same numbers — and you will see it is a different, larger figure.

Margin vs markup: the crucial difference

Margin and markup use the same profit but divide by different things, so they are not interchangeable.

• Margin percent = profit / selling price times 100
• Markup percent = profit / cost times 100

For the cost 60, price 100 example: margin is 40 / 100 = 40%, but markup is 40 / 60 = 66.7%. Markup is always the larger number because cost is smaller than price. Confusing the two leads to underpricing. Decide which your business uses and stay consistent.

Quick margin and markup reference

How the two relate at common levels:

Notice markup climbs much faster than margin as price rises above cost — another reason not to mix them up.

When to use it

Margin matters anywhere you set or review prices: pricing ecommerce products, quoting freelance or agency work, setting menu prices, comparing supplier costs, or checking whether a discount still leaves you profitable. Founders, sellers and freelancers use it to protect their bottom line and to spot products that look like winners but barely break even after costs.

Tips and common mistakes

Price with care:

• Always confirm whether a target is a margin or a markup before setting prices.
• Include all costs of goods, not just the purchase price — shipping, fees and packaging eat margin.
• A discount cuts margin faster than it cuts price, so model it before promoting.
• Aim margins to cover overheads too, not just the item cost.

For markup specifically, the Markup Calculator focuses on it, and the Discount Calculator checks sale pricing. Browse more free calculators.

Is it private?

Yes. The Profit Margin Calculator runs entirely in your browser, so your cost and price figures are never uploaded or stored. There is no account and no tracking of your numbers, and it works offline once loaded. Explore more free, private tools for pricing and money tasks.