Profit Margin Calculator
Profit margin is the share of the selling price left after cost: (price − cost) ÷ price × 100. A $50 Cost Price with a $75 Selling Price returns $25.00 gross profit, a 33.33% margin and a 50.00% markup. On the Calculate Price tab that same $50 cost at a 30% desired margin gives a $71.43 price.
Margin vs Markup
Profit Margin
Margin = (Revenue - Cost) / Revenue × 100
Margin is the percentage of the selling price that is profit.
Markup
Markup = (Revenue - Cost) / Cost × 100
Markup is the percentage added to the cost to get the selling price.
Margin Reference Table
| Margin | Markup | Multiplier | Example Price |
|---|---|---|---|
* Based on a cost of $50
About Profit Margin Calculator
This profit margin calculator works in three directions, so it answers the pricing question you actually have. The Calculate Margin tab takes a Cost Price and a Selling Price and returns three figures at once: gross profit in money, profit margin as a percentage of the selling price, and markup as a percentage of the cost. Calculate Price runs the arithmetic backwards — give it a cost and a desired margin and it prints the price you have to charge. Calculate Cost is the buyer's version: give it a selling price and a target margin and it prints the highest cost you can pay.
The four formulas are the standard accounting ones and the page prints two of them next to the results: margin = (price − cost) ÷ price, markup = (price − cost) ÷ cost, price = cost ÷ (1 − margin) and cost = price × (1 − margin). Margin and markup are the two numbers most often confused, because the same $25 profit on a $50 cost is a 50.00% markup but only a 33.33% margin. The Margin Reference Table converts every margin from 10% to 60% into its equivalent markup and price multiplier, with an example price built on a cost of $50.
What it does not do: it computes gross margin from one cost and one price. Operating and net margin are out of scope, so overheads, wages, shipping, payment fees, returns and tax are never deducted — feed it a fully loaded unit cost if you want those inside the figure. Amounts are labelled with a dollar sign, but the arithmetic is currency-neutral and the same numbers hold in euros or pounds. A desired margin of 100% or more returns $0.00, because cost ÷ (1 − 1) has no answer.
Every figure is computed by JavaScript in your browser, so the costs and prices you type are never sent to a server.
Use Cases
How to use
Stay on the Calculate Margin tab and type your unit cost into Cost Price ($) and the price you charge into Selling Price ($).
Read the three result tiles: Gross Profit in dollars, Profit Margin as a percentage of the selling price, and Markup as a percentage of the cost.
Press Calculate Price when you know the cost but not the price. Enter Cost Price and Desired Margin (%) and the blue panel prints the selling price you should charge.
Press Calculate Cost to work from a fixed shelf price. Enter Selling Price and Target Margin (%) and the purple panel prints the maximum cost you can pay.
Open Margin vs Markup to see the two formulas side by side, then use the Margin Reference Table to convert any margin from 10% to 60% into its markup and price multiplier.
Pro Tips
- The three tabs keep separate inputs. The cost you typed under Calculate Margin does not copy into Calculate Price, so retype it after switching or you will be pricing against the default $50.
- Leave Cost Price empty and the tool reads it as 0: Profit Margin jumps to 100% and Markup shows 0%, because dividing a profit by a zero cost is undefined. Always type a cost, however small.
- In Calculate Price a Desired Margin of 100 or more deliberately returns $0.00 — cost ÷ (1 − 1) has no value. Stay below 100 and use markup when you need a percentage that can exceed 100.
- If Selling Price is below Cost Price the tiles go negative: $40 against a $50 cost shows −$10.00 gross profit and −25.00% margin. The minus sign is the loss per unit, not a bug in the tool.
- The Margin Reference Table is always built on a cost of $50, as its footnote says. For your own costs use the Multiplier column rather than Example Price: a 30% margin means price = cost × 1.43.
Troubleshooting
Markup shows 0% while Profit Margin shows 100%.
Cost Price is empty or zero. The markup formula divides the profit by the cost, so the tool prints 0% instead of an infinite value. Type the real unit cost — even $0.01 — and both percentages recalculate on the next keystroke.
Calculate Price returns a selling price of $0.00.
Desired Margin is 100 or higher. Price = cost ÷ (1 − margin) has no solution at 100%, so the tool returns $0.00 rather than an error. Enter a margin below 100, or read the Markup column of the reference table when you need a percentage above 100.
Gross Profit and Profit Margin come out negative.
Selling Price is lower than Cost Price, so you lose money on each unit: $40 against a $50 cost shows −$10.00 and −25.00%. Check that the two fields are not swapped before treating the minus sign as a fault.
Frequently Asked Questions
Profit margin = (selling price − cost) ÷ selling price × 100. Enter $50 as Cost Price and $75 as Selling Price on the Calculate Margin tab and the tool shows $25.00 gross profit and a 33.33% margin. The denominator is the price, not the cost: dividing the same $25 by the cost gives markup instead, which is 50.00% for that pair.
A 30% margin on a $100 selling price leaves $30 of gross profit and allows a maximum cost of $70. Check it on the Calculate Cost tab: enter 100 as Selling Price and 30 as Target Margin and the purple panel returns $70.00. Expressed against the cost instead, the same deal is a 42.86% markup.
Divide the cost by 0.30, because price = cost ÷ (1 − 0.70). On the Calculate Price tab a $50 Cost Price with a 70% Desired Margin returns $166.67. Against the cost that is a 233.33% markup, which is why a 70% margin sounds smaller than the price increase it actually requires.
It means 30 cents of every dollar of revenue is left once the item's cost is paid, and nothing else has been deducted yet. A $71.43 price on a $50 cost shows $21.43 gross profit and a 30.00% margin in the tool. Rent, wages, advertising, payment fees and tax all still come out of that 30 cents.
A 100% margin would mean the item costs nothing, so price = cost ÷ (1 − 1) has no answer. Type 100 into Desired Margin and the Calculate Price tab returns $0.00 rather than an error. What people usually mean is a 100% markup — doubling the cost — and doubling gives a 50% margin, not 100%.
They measure the same gross profit against different bases: margin divides it by the selling price, markup by the cost. A $50 cost sold at $75 is $25 profit, a 33.33% margin and a 50.00% markup. To convert, margin = markup ÷ (1 + markup). The Margin Reference Table lists every pair from 10% to 60% margin.
A 20% margin keeps one fifth of the selling price as gross profit. On a $50 cost that is a $62.50 price: enter 20 as Desired Margin on Calculate Price and the tool returns $62.50, a 25.00% markup. The reference table shows the same row as 20% margin, 25% markup and a 1.25x multiplier.
This calculator does not rank margins, because an acceptable level depends on the sector, the volume and what the margin still has to cover. Use it to compare your own options instead: Calculate Price shows what a 30% target does to your price, and Calculate Cost shows the highest unit cost that still leaves 30% at the price you already charge.
Arithmetically there are only two levers and the tool measures both. Lower the Cost Price, or raise the Selling Price, and watch the Profit Margin tile. Starting from $50 cost and $75 price, cutting the cost to $45 lifts the margin from 33.33% to 40.00%, while raising the price to $80 lifts it to 37.50%.
Yes, they are ordinary arithmetic. With the cost in A2 and the price in B2, margin is =(B2-A2)/B2 formatted as a percentage, markup is =(B2-A2)/A2, and the price for a target margin held in C2 is =A2/(1-C2). The results match this page exactly; the calculator only saves you from retyping the parentheses.