Profit Margin Calculator
Calculate profit margin, markup, and profit amount for any product or service. Compare gross and net margins with a visual revenue breakdown.
How to Use This Profit Margin Calculator
- Choose input mode: Cost + Selling Price or Revenue + Profit.
- Enter your Cost and Selling Price, or Revenue and Profit.
- Click Calculate Margins to see profit margin percentage, markup, profit amount, and a visual revenue breakdown.
Formula
Markup = (Revenue − Cost) / Cost × 100%
Profit = Revenue − Cost
Margin is the percentage of revenue that is profit (based on selling price). Markup is the percentage added to cost to determine selling price. A 50% markup results in a 33.3% margin — they are related but not the same.
Examples
Cost: $50, Selling Price: $80:
Profit = $30, Margin = 30/80 × 100 = 37.5%, Markup = 30/50 × 100 = 60%
Revenue: $10,000, Profit: $3,000:
Cost = $7,000, Margin = 3,000/10,000 × 100 = 30%, Markup = 3,000/7,000 × 100 = 42.86%
Cost: $10, Selling Price: $50:
Profit = $40, Margin = 40/50 × 100 = 80%, Markup = 40/10 × 100 = 400%
Frequently Asked Questions
What is profit margin?
Profit margin is the percentage of revenue that exceeds the cost of goods sold. It measures how much of every dollar in revenue is kept as profit after all costs are accounted for.
What is the difference between margin and markup?
Margin is calculated as profit divided by selling price (revenue), while markup is profit divided by cost. A 50% markup equals a 33.3% margin. Markup determines how much to add to cost; margin shows how much profit is in each dollar of revenue.
What is a good profit margin?
Profit margins vary by industry. Generally, 5–10% is low, 10–20% is healthy, and 20%+ is strong. Software companies often see 20–40% margins, while restaurants may see 3–9%. Compare within your industry for context.
How do I calculate gross margin?
Gross Margin = (Revenue − Cost of Goods Sold) / Revenue × 100%. This calculator shows gross margin using your cost and selling price. For net margin, subtract all operating expenses from revenue before dividing by revenue.