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Profit Margin Calculator

This profit margin calculator shows your gross margin and markup from a cost and a price, or the price you need to charge to hit a target margin. It is the companion to our markup calculator: margin is the share of the price you keep as profit.

Runs in your browser — nothing is uploaded.

Results are estimates based on the rates shown. Your actual fees depend on your agreement with the provider.

How to use it

  1. Pick a mode: margin from cost and price, or price from cost and a target margin.
  2. Enter your cost and either the selling price or the margin you want.
  3. Read the margin, markup, profit and price.

The margin formulas

Gross margin is profit as a percentage of the selling price: margin = (price − cost) ÷ price × 100. Price for a target margin: price = cost ÷ (1 − margin ÷ 100).

Worked example: an item costs $60.00 and sells for $100.00. The profit is $40.00, so the gross margin is 40.0% and the markup is 66.7%.

To hit a 40% margin on a $60.00 cost, charge $100.00. A 40% margin needs a 66.7% markup, not 40%.

Frequently asked questions

How do you calculate profit margin?

Subtract cost from the selling price, divide by the selling price, and multiply by 100. For a $100 price and a $60 cost, that is (100 − 60) ÷ 100 = 40%.

What is gross margin versus net margin?

Gross margin only subtracts the direct cost of what you sold. Net margin also subtracts overhead, fees, taxes and interest. This calculator shows gross margin; include fees such as card processing in your cost if you want a fuller picture.

What is a good profit margin?

It varies widely by industry and business model, so we do not give a single number. Compare against your own costs and your sector's norms from a reliable source.

How do I set a price for a target margin?

Divide your cost by 1 minus the target margin as a decimal. For a 40% margin on a $60 cost: 60 ÷ 0.60 = $100.

Is margin the same as markup?

No. Margin divides profit by price, markup divides profit by cost. The markup calculator converts between them.

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