Profit Margin Calculator
Calculate gross profit, profit margin and markup from selling price and cost. This is a business pricing calculation, not a trading margin account tool.
FREE ONLINE CALCULATOR
Profit Margin Calculator
Change the settings below to calculate your result. You can check the assumptions further down this page.
Profit = selling price − cost; margin = profit / selling price; markup = profit / cost.
How to use this profit margin calculator
Enter your selling price and the direct cost. Margin measures profit relative to revenue, while markup measures profit relative to cost.
Formula and calculation method
Profit = selling price − cost; margin = profit / selling price; markup = profit / cost.
Worked example
If a product costs $60 and sells for $100, gross profit is $40, margin is 40% and markup is about 66.7%.
Understanding the result
Margin and markup use different denominators. A product with a 40% margin does not have a 40% markup. Mistaking the two can lead to incorrect pricing decisions, especially when a business aims for a particular margin target.
When to use this calculator
The result here is a gross calculation. Include the full direct cost of supplying the product or service, then separately account for expenses such as rent, software, staff and marketing when evaluating business profitability.
What the results do not include
This tool does not subtract overhead, tax or other operating expenses unless included in your entered cost.
Frequently asked questions
What is the difference between margin and markup?
Margin divides profit by selling price. Markup divides it by cost.
Can profit margin be negative?
Yes. Selling below cost produces a negative margin.
For education and estimates only. Check any contractual, tax, banking or employment terms that apply to your situation. The calculations are not financial advice or guaranteed returns.