Profit Margin & Markup Calculator
Work out your profit margin and markup, or the price you need to charge. Enter your cost and selling price to see both percentages, or enter a target margin or markup to get the selling price.
Margin and markup describe the same profit two ways: margin as a share of the price, markup as a share of the cost. Mixing them up is one of the most common pricing mistakes, so the calculator shows both every time.
Calculator
Profit margin
33.33%
- Selling price
- $60.00
- Profit per unit
- $20.00
- Gross profit margin
- 33.33%
- Markup on cost
- 50%
Margin is profit as a share of the price; markup is profit as a share of the cost. The same $20.00 is a 33.33% margin but a 50% markup.
| Profit margin | Equivalent markup | Price on $40.00 cost |
|---|---|---|
| 10% | 11.11% | $44.44 |
| 15% | 17.65% | $47.06 |
| 20% | 25% | $50.00 |
| 25% | 33.33% | $53.33 |
| 30% | 42.86% | $57.14 |
| 40% | 66.67% | $66.67 |
| 50% | 100% | $80.00 |
| 60% | 150% | $100.00 |
Gross margin only — doesn’t include overhead, shipping, payment processing, or taxes. Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
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Calculation Formulas
Profit as a share of revenue.
Example:
($60 − $40) ÷ $60 = 33.3%.
Profit as a share of cost.
Example:
($60 − $40) ÷ $40 = 50%.
A 25% margin equals a 33.3% markup.
Key Figures
| Figure | Value | Description |
|---|---|---|
| Gross only | — | Overhead, shipping, and taxes are not included. |
Note: Results are estimates for planning purposes. Rates, fees, taxes, and insurance vary by lender and location — confirm exact figures with a licensed professional before making financial decisions.
Standards & Sources
Last verified: October 2026
- Standard accounting definitions
Gross profit margin and markup on cost as used in retail and small-business pricing.
- Gross vs. net
Net margin also subtracts operating expenses; use this as a per-unit pricing tool.
How to Use This Calculator
- Choose whether you know the price or want to find it from a target margin or markup.
- Enter your cost per unit.
- Enter the selling price, or your target margin or markup.
- Read the margin, markup, profit per unit, and price.
Frequently Asked Questions
How do you calculate profit margin?
Profit margin = (price − cost) ÷ price × 100. An item that costs $40 and sells for $60 has a $20 profit and a 33.3% margin.
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. The $20 profit on a $40 item sold for $60 is a 33.3% margin but a 50% markup.
How do I price for a target margin?
Divide the cost by (1 − target margin). For a 40% margin on a $40 cost, the price is $40 ÷ 0.60 = $66.67. Adding 40% to cost ($56) would give only a 28.6% margin.
What is a good profit margin?
It varies widely by industry — grocery stores often run single-digit net margins, while software and services can exceed 20%. Gross margin, before overhead, is always higher than net margin.
Guides to go with this calculator
Markup vs. Margin: Formulas and Conversion Table
A 50% markup is only a 33% margin. Mixing the two up is one of the most common pricing mistakes — here are both formulas, a conversion table, and how to set a price that hits your target.
How Much to Tip: A Guide for Every Situation
Tipping norms have drifted, and the screen at the counter doesn’t help. Here are the common U.S. ranges for every situation, whether to tip on tax, and the mental math to get it right in seconds.
How to Calculate a Percentage (4 Formulas)
Almost every percentage question is one of four formulas. Here they are with worked examples — plus the mental-math tricks for tips and sale prices, and the one mistake that trips up percent change.
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