Profit Margin Calculator
Work out gross profit, profit margin and markup from cost and price, or solve backwards from a target margin.
Fill in the fields above to see your margin.
Profit margin —
| Selling price | — |
|---|---|
| Cost | — |
| Gross profit per unit | — |
| Profit margin | — |
| Markup on cost | — |
Totals
| Total revenue | — |
|---|---|
| Total cost | — |
| Total gross profit | — |
How it works
This is a gross profit margin calculator: it compares your selling price
with the direct cost of the item (cost of goods sold), before overheads, salaries or tax.
Gross profit is price − cost, the profit margin is
(price − cost) ÷ price × 100 and the markup is
(price − cost) ÷ cost × 100. Margin is a share of the price, markup is
a share of the cost — which is why a product that costs 40 and sells for 100 has a
60% margin but a 150% markup.
Switch the first dropdown to work backwards. Given a cost and a target margin the price is
cost ÷ (1 − margin ÷ 100), so a 70 cost at a 30% margin must sell for 100.
Given a price and a target margin the cost you can afford is
price × (1 − margin ÷ 100). Given a cost and a target markup the price is
cost × (1 + markup ÷ 100). Add the number of units you expect to sell and the
table also shows total revenue, total cost and total gross profit.
A target margin of 100% or more is impossible — it would mean the item costs nothing — so the calculator flags it instead of returning a nonsense price. If the price is below the cost you get a negative margin, which is the correct answer for a loss-making sale. Everything is plain JavaScript running in your browser: no signup, no ads and none of your numbers leave your device.
Frequently asked questions
How do you calculate profit margin?
Gross profit margin is profit divided by the selling price: margin = (price − cost) ÷ price × 100. An item that costs 40 and sells for 100 makes 60 profit, so the margin is 60 ÷ 100 = 60%. This is gross margin, which only subtracts the direct cost of the goods, so overheads, salaries and tax come out of that 60% afterwards.
What is the difference between margin and markup?
Margin is a share of the selling price, markup is a share of the cost. The same 40 cost sold at 100 is a 60% margin but a 150% markup, because 60 profit is 60% of the 100 price and 150% of the 40 cost. Markup is always the bigger number, and mixing the two up is the classic pricing mistake: a 30% markup only leaves a 23.1% margin. This calculator shows both at once.
How do I set a price for a target profit margin?
Divide the cost by one minus the margin rather than adding the percentage on top: price = cost ÷ (1 − margin ÷ 100). At a 30% target margin a 70 cost must sell for 70 ÷ 0.7 = 100. Adding 30% to 70 would give 91, which is only a 23.1% margin. A target margin of 100% or more is impossible, since it would mean the item costs nothing, so the calculator flags that instead of returning a bogus price.