CalculatorEver logoCalculatorEver
CalculatorsConvertersAbout UsContact

Profit Margin Calculator

Find your profit margin and markup from a cost and a selling price, work out the price you need for a target margin, or go from revenue to net profit.

  • Free to use
  • No sign-up
  • Numbers stay in your browser

Last updated:

Find Your Margin

Try:
Your gross profit margin is
40%
You make 40 on a 100 sale. The markup on the cost is 66.67%.
  • Profit40
  • Margin (of price)40%
  • Markup (of cost)66.67%
  • Cost60
  • Selling price100
  • Profit per 1 of sales0.40

Margin is profit ÷ selling price. Profit percentage (profit ÷ cost) is the markup. They are different numbers: a 40% margin is a 66.67% markup. Need a price for a target margin? Use the Selling Price tab. For the point where your sales cover your costs, use the Break-Even Calculator.

About Profit Margin Calculator

A profit margin calculator shows how much of each sale you keep as profit. It also gives the markup, works out the price you need for a margin you want, and takes revenue down to net profit.

Margin = (Price − Cost) ÷ Price × 100

Margin or Markup?

MarginMarkup
10%11.11%
20%25%
25%33.33%
30%42.86%
40%66.67%
50%100%

A 25% margin is a 33.33% markup, and a 50% margin is a 100% markup. The full table is below.

Quick Formulas

  • Profit = price − cost
  • Margin = profit ÷ price
  • Markup = profit ÷ cost
  • Price = cost ÷ (1 − margin)
  • Price = cost × (1 + markup)

Selling Price for a Target Margin

What price gives a 30% margin? For a cost of 60.

MarginPriceProfitMarkup
66.676.6711.11%
751525%
802033.33%
85.7125.7142.86%
1004066.67%
12060100%
15090150%
200140233.33%
300240400%

The cost comes from the calculator. Click a margin to find that price in the calculator.

Selling Price for a Target Markup

What price gives a 50% markup? For a cost of 60.

MarkupPriceProfitMargin
6669.09%
721216.67%
751520%
781823.08%
842428.57%
903033.33%
1054542.86%
1206050%
1509060%

Markup is added to the cost, so the margin is always smaller than the markup.

Markup to Margin

What margin does a 50% markup give?

MarkupMargin
5%4.76%
10%9.09%
15%13.04%
20%16.67%
25%20%
30%23.08%
40%28.57%
50%33.33%
60%37.5%
75%42.86%
100%50%
150%60%
200%66.67%
Margin = markup ÷ (1 + markup). A 100% markup (doubling the cost) is a 50% margin.

Margin to Markup

What markup do you need for a 40% margin?

MarginMarkup
10%11.11%
20%25%
25%33.33%
30%42.86%
40%66.67%
50%100%
60%150%
70%233.33%
75%300%
80%400%
90%900%
Markup = margin ÷ (1 − margin). A margin can never reach 100%, but a markup can be any size.

Gross, Operating and Net Margin

Three margins, each takes off more costs.

MarginFormula
Gross margin(Revenue − COGS) ÷ Revenue
Operating margin(Revenue − COGS − operating expenses) ÷ Revenue
Net margin(Revenue − COGS − operating expenses − interest − taxes) ÷ Revenue
The margin in the first three tabs is the gross margin: price minus the cost of the item, divided by the price.

Try an Example

Pick one to fill in the calculator and see its answer.

ExampleResult
40% margin, 66.67% markup
Price 100
Price 75, 33.33% margin
Cost 140
Price 15, 33.33% margin
22% net margin

Click an example to put it into the calculator.

Good to know

  • Margin is profit as a share of the selling price. Markup is profit as a share of the cost.
  • A margin is always below 100%, because profit can never be all of the price. A markup can be any size.
  • The first three tabs use the cost of the item only, so the margin is the gross margin. The Gross to Net tab takes off more costs.
  • A negative profit is a loss, and the margin and markup show as negative numbers.

What is included

  • Margin, markup and profit from a cost and a price
  • Selling price for a target margin or markup
  • Cost from a price and a margin or a profit
  • Gross, operating and net margin
  • Margin and markup conversion tables
  • Copy link and Print

Important to know

Your numbers stay in your own browser and are never sent anywhere. The margins here only count the costs you enter, so check your own books for tax, shipping, fees and other overheads.

Use this free profit margin calculator to find your gross profit margin, profit and markup from a cost and a selling price, to work out the selling price you need for a target margin or markup, to find the cost from a price and a margin, or to take revenue down to gross, operating and net margin. Tables show the price for common margins and markups, how to turn a markup into a margin and back, and the formulas for gross, operating and net margin. It is free and instant, and your numbers stay in your browser.

How to calculate profit margin

Profit margin tells you how much of each sale you keep as profit. Take the selling price, subtract what the product costs you, and divide the result by the selling price. Multiply by 100 to get a percentage. This is the gross profit margin, because it only looks at the cost of the product itself and not at running costs such as rent, wages or tax.

Example: a product costs $60 and sells for $100
profit = 100 − 60 = 40
margin = 40 ÷ 100 = 40%

Margin and markup are not the same

Margin is profit as a share of the selling price. Markup is profit as a share of the cost. The same product has both, and the markup is the bigger number. The product above has a 40% margin and a 66.67% markup (40 ÷ 60). A product that costs 75 and sells for 100 has a 25% margin but a 33.33% markup. Mixing the two up is a common pricing mistake: adding 25% to a cost does not give a 25% margin. Some sites call the markup the “profit percentage”, so check which one a number means.

  • Margin = (price − cost) ÷ price
  • Markup = (price − cost) ÷ cost
  • Margin from markup = markup ÷ (1 + markup), and markup from margin = margin ÷ (1 − margin)

How to find the selling price for a target margin

Use the Selling Price tab when you know the cost and the profit you want. For a margin of 40% on a cost of 60, the price is the cost divided by (1 − 0.40), which is 100. For a markup of 50% on the same cost, the price is 60 × 1.50 = 90, and the margin on that sale is 33.33%. The tables under the calculator list the price for common margins and markups.

Price from margin: cost ÷ (1 − margin)
Price from markup: cost × (1 + markup)
Cost from price and margin: price × (1 − margin)

Gross, operating and net profit margin

Gross margin takes off only the cost of goods sold (COGS), the direct cost of what you sell. Operating margin also takes off operating expenses such as rent and wages. Net margin takes off interest and taxes as well, so it shows what is left for the owners. The Gross to Net tab works all three out from your revenue.

Example: revenue 500,000, cost of goods sold 200,000, operating expenses 150,000, interest 10,000, taxes 30,000
gross profit = 300,000, so the gross margin is 60%
operating profit = 150,000, so the operating margin is 30%
net profit = 110,000, so the net margin is 22%

What is a good profit margin?

It depends on the industry and on the kind of margin. A shop that sells many items cheaply and a software company have very different margins, so compare yours with similar businesses rather than with one number. Remember that net profit, after all costs, is lower than the gross margin this calculator shows first.

How to improve your profit margin

There are two main levers: raise the price, or lower the cost. Check your prices against your costs often, look for cheaper suppliers or less waste, drop products that earn little, and sell more of the ones with the best margin. Use the Selling Price tab to see what a price change does to your margin before you make it.

Profit margin in Excel and Google Sheets

If the cost is in cell A2 and the price is in B2, the margin is =(B2-A2)/B2 and the markup is =(B2-A2)/A2. Format the cells as percentages. The price for a 40% margin on a cost in A2 is =A2/(1-0.4).

Contribution margin

Contribution margin is the sales of a product minus its variable costs, the costs that change with how many you make or sell. It shows how much each sale adds towards paying your fixed costs and then profit. To find how many sales you need to cover your fixed costs, use the Break-Even Calculator.

Calculators that go with this one

To work out a sale price after a discount, use the Discount Calculator. To add tax to a price, use the Sales Tax Calculator or the VAT Calculator, and for percentages in general use the Percentage Calculator.

View All Calculators

Frequently Asked Questions

How do I calculate profit margin?

Subtract the cost from the selling price to get the profit, divide the profit by the selling price and multiply by 100. For example, a cost of $60 and a price of $100 gives a profit of $40 and a margin of 40%.

What is the gross profit margin formula?

Gross profit margin = (revenue − cost of goods sold) ÷ revenue × 100. With revenue of 500,000 and cost of goods sold of 200,000, the gross profit is 300,000 and the gross margin is 60%. The Gross to Net tab works it out for you.

What is the difference between margin and markup?

Margin is profit divided by the selling price. Markup is profit divided by the cost. For a cost of 75 and a price of 100, the margin is 25% and the markup is 33.33%. The markup is always the bigger number, so a 25% markup does not give a 25% margin.

How do I turn a margin into a markup, and back?

Markup = margin ÷ (1 − margin), and margin = markup ÷ (1 + markup). A 25% margin is a 33.33% markup, a 50% margin is a 100% markup, and a 50% markup is a 33.33% margin. The Margin to Markup and Markup to Margin tables list the common values.

How do I find the selling price for a target margin?

Divide the cost by 1 minus the margin as a decimal. For a cost of 60 and a margin of 40%, the price is 60 ÷ 0.60 = 100. Use the Selling Price tab and choose Margin %. For a markup, multiply the cost by 1 plus the markup instead: a 50% markup on 60 gives 90.

How do I calculate profit percentage?

Profit percentage usually means profit ÷ cost × 100, which is the markup. A cost of 60 and a price of 100 gives 66.67%. Some people use the same words for the margin (profit ÷ price), which is 40% here. This calculator shows both and labels them clearly.

How do I calculate net profit margin?

Net profit margin = net profit ÷ revenue × 100, where net profit is revenue minus cost of goods sold, operating expenses, interest and taxes. With revenue of 500,000, cost of goods sold of 200,000, operating expenses of 150,000, interest of 10,000 and taxes of 30,000, the net profit is 110,000 and the net margin is 22%.

What is the difference between gross, operating and net margin?

Gross margin takes off only the cost of goods sold. Operating margin also takes off operating expenses such as rent and wages. Net margin takes off interest and taxes as well. Each one is lower than the one before.

What is a good profit margin?

It depends on the industry and on which margin you mean, so there is no single answer. Compare your margin with similar businesses and with your own past results, and remember that net margin is lower than gross margin.

How do you determine the profitability of an item?

Work out its profit (the selling price minus all the costs of selling it, such as the product cost, packaging, shipping and fees), then its margin (profit ÷ price). An item is profitable if the profit is above 0 after all of those costs, and a higher margin means it keeps more of each sale. Compare items by margin to see which earn the most.

How do I calculate margin in Excel or Google Sheets?

If the cost is in A2 and the price is in B2, use =(B2-A2)/B2 for the margin and =(B2-A2)/A2 for the markup, and format the cells as percentages. The price for a 40% margin on a cost in A2 is =A2/(1-0.4).

Can a profit margin be more than 100%?

No. Profit is part of the price, so the margin is always below 100%. A markup can be more than 100%: a product that costs 10 and sells for 30 has a 200% markup but a 66.67% margin.

Can a margin be negative?

Yes. If you sell for less than the cost, the profit is a loss and the margin is negative. A cost of 120 and a price of 100 is a loss of 20 and a margin of −20%. The calculator labels it as a loss.

What is contribution margin?

Contribution margin is sales minus variable costs, the costs that change with how much you make or sell. It shows how much each sale adds towards your fixed costs and profit. The Break-Even Calculator uses it to find how many sales you need to cover your fixed costs.

How can I improve my profit margin?

Raise your prices, lower your costs, or both. Look for cheaper suppliers or less waste, drop products that earn little, and sell more of those with the best margin. Use the Selling Price tab to see what a new price does to your margin.

Are my numbers saved or shared?

No. The calculation happens in your browser, and the numbers you enter are not stored or sent to any server. A link you copy keeps the numbers after the # sign, which browsers never send to a server.