Profit Margin Calculator
The profit margin calculator shows how much of each sale you actually keep. Enter what a product costs you and the price you sell it for, and it instantly returns your gross profit in dollars, your profit margin as a percentage of the selling price, and the equivalent markup. Use it to compare products, sanity-check a price, or see how a cost change squeezes your margin. These are general business-maths calculators — the figures are estimates, so confirm the numbers behind a real pricing decision with your accountant.
Calculator
The formula
Margin % = (price − cost) ÷ price × 100
Subtract the unit cost from the selling price to get the profit in dollars, then divide that profit by the selling price and multiply by 100. Margin is always measured against the price you sell at, which is why it can never exceed 100%. The calculator also shows markup, which divides the same profit by the cost instead.
Worked example
A product costs you $40 and you sell it for $60.
- Profit = 60 − 40 = $20
- Margin = 20 ÷ 60 × 100 = 33.3%
- Markup = 20 ÷ 40 × 100 = 50%
So one third of every $60 sale is gross profit.
Frequently asked questions
- What's the difference between margin and markup?
- Margin divides profit by the selling price; markup divides the same profit by the cost. A $20 profit on a $40 cost sold at $60 is a 33.3% margin but a 50% markup — same money, two different percentages.
- Can margin be more than 100%?
- No. Because margin is profit as a share of the selling price, the most you can keep is the whole price, which is 100%. Markup has no such ceiling.
- Is this gross or net margin?
- This is gross margin — it uses the direct cost of the item only. Net margin also subtracts overheads, tax and other expenses; for those decisions, check the full picture with your accountant.
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