Calculate your profit margin, markup, or find the right selling price. No formulas to remember.
What you paid
Enter a valid cost.
What you charge
Enter a valid selling price.
What you paid
Enter a valid cost greater than 0.
Desired profit margin (%)
Enter a margin below 100%.
Profit Margin
0%
of the selling price is profit
Margin
0%
of selling price
Markup
0%
on top of cost
Cost: $0.00 (50%)Profit: $0.00 (50%)
–
Profit
–
Margin %
–
Markup %
Required Selling Price
$0.00
to achieve your target margin
Margin
0%
of selling price
Markup
0%
on top of cost
Cost: $0.00 (60%)Profit: $0.00 (40%)
–
Profit per Unit
–
Margin %
–
Markup %
Try:
How It Works
Profit margin tells you what percentage of your selling price is actual profit. If you sell something for $100 and it cost you $60, your profit is $40. That $40 is 40% of the $100 selling price, so your profit margin is 40%. The remaining 60% covers your cost.
Margin divides by selling price. Markup divides by cost. Same profit, different result.
You do not need to memorize these. Enter your numbers in the calculator above and get both percentages instantly.
Why Markup and Margin Are Different (and Why It Matters)
This is the single most common pricing mistake in business. Margin and markup describe the same dollar profit but use different reference points. Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. Because the selling price is always larger than the cost, margin is always smaller than markup for the same transaction.
A real example that catches people off guard
You buy a product for $60 and apply a 50% markup. You charge $90. Your profit is $30. But your margin is not 50%. It is 33.3% because $30 is 33.3% of the $90 selling price. If your business plan says “we need a 50% margin,” a 50% markup will not get you there. You would need a 100% markup (charging $120) to hit a 50% margin.
Key rule to remember
Markup is how you set your price. Margin is how you measure your profitability. Never use markup when someone asks for your margin, and never set prices based on a margin target without converting it to markup first.
When People Use This Calculator
Pricing a new product
You know your cost and you know the margin your business needs to survive. Switch to the “Find Selling Price” tab, enter your cost and target margin, and get the exact price to charge. No trial and error. No guessing.
Checking if a price is profitable enough
Your competitor charges $45 for something that costs you $30. Use the “Calculate Margin” tab to see what margin that price gives you (33.3%). Then decide if that is enough for your business to cover overhead, taxes, and profit goals.
Preparing financial reports
Accountants, bookkeepers, and business owners need margin numbers for income statements. Enter your revenue and cost of goods sold as selling price and cost to get the gross margin percentage that goes directly into your report.
Negotiating with suppliers or distributors
A distributor asks for a 25% margin on your product. If your cost is $40 and you want the distributor to get a 25% margin, the selling price to the distributor is $40 / (1 – 0.25) = $53.33. Without this calculation, you might incorrectly set the price at $50 (thinking 25% of $40 is $10, so add $10), which actually gives a 20% margin, not 25%.
Comparing products in a catalog
If Product A has a 55% margin and Product B has a 22% margin, you know Product A is far more profitable per dollar of revenue, even if both generate the same total sales. This helps you decide where to focus marketing and inventory spend.
Pricing tip
Most businesses underprice their products because they confuse markup with margin. If your target is a 40% margin, you need a 66.7% markup, not a 40% markup. Use the “Find Selling Price” tab to get this right every time.
Mistake 1: Setting prices with markup when margin was requested
Your boss says “we need a 30% margin on this product.” You take your $70 cost, add 30% ($21), and charge $91. But the actual margin is 23.1%, not 30%. To hit 30% margin, you need to charge $100. The difference is $9 per unit, which adds up fast at scale.
Mistake 2: Comparing your margin to someone else’s markup
A supplier tells you “we only mark up 20%.” That sounds low. But a 20% markup on a $50 cost gives $60 selling price, which is a 16.7% margin. If your margin is 15%, you are actually behind them, not ahead. Always compare margin to margin and markup to markup.
Mistake 3: Forgetting that margin can be negative
If your selling price is lower than your cost, you have a negative margin. This means you lose money on every sale. The calculator handles this and shows it in red. If you see a negative margin, you need to either raise your price or lower your cost immediately.
Mistake 4: Using margin when you should use markup (or vice versa) in spreadsheets
If your spreadsheet formula divides profit by cost, that is markup, not margin. If it divides profit by revenue, that is margin. Label your columns clearly. Mixing them in the same sheet without labels is a fast way to make wrong decisions.
Table of Truth: Common Margin and Markup Examples
Notice how the same dollar profit produces very different margin and markup percentages depending on the selling price.
Cost
Sell Price
Profit
Margin
Markup
$50
$100
$50
50.00%
100.00%
$60
$100
$40
40.00%
66.67%
$70
$100
$30
30.00%
42.86%
$80
$100
$20
20.00%
25.00%
$90
$100
$10
10.00%
11.11%
$15
$30
$15
50.00%
100.00%
$8
$22
$14
63.64%
175.00%
$50
$149
$99
66.44%
198.00%
$100
$100
$0
0.00%
0.00%
$120
$95
-$25
-26.32%
-20.83%
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. They describe the same dollar profit but use different denominators. A 50% markup on a $100 cost gives $150 selling price and a 33.3% margin. Mixing them up causes pricing mistakes.
How do I calculate profit margin?
Profit Margin = ((Selling Price – Cost) / Selling Price) x 100. For example, if you buy for $60 and sell for $100, your margin is ((100 – 60) / 100) x 100 = 40%. This calculator does the math for you.
How do I calculate markup?
Markup = ((Selling Price – Cost) / Cost) x 100. If you buy for $60 and sell for $100, your markup is ((100 – 60) / 60) x 100 = 66.67%. Markup is always a larger number than margin for the same sale.
What is a good profit margin?
It depends on the industry. Retail typically sees 5-15% margins. Restaurants run 3-9%. Software and digital products can reach 70-90%. Service businesses often achieve 20-50%. A 10% net margin is generally considered healthy across most industries.
How do I find my selling price from a target margin?
Selling Price = Cost / (1 – Margin/100). For example, if your cost is $50 and you want a 40% margin, your selling price is 50 / (1 – 0.40) = $83.33. Use the Find Selling Price tab on this calculator to do this instantly.
Why is my margin lower than my markup?
Because margin divides profit by the larger number (selling price) while markup divides by the smaller number (cost). Since selling price always includes both cost and profit, it is always bigger than cost alone. So dividing by a bigger number gives a smaller percentage. This is not an error. It is how the math works.
Can profit margin be negative?
Yes. If your selling price is lower than your cost, you have a negative margin. This means you lose money on every sale. The calculator shows this in red. A negative margin is a warning sign that your pricing or costs need immediate attention.
Is this calculator free?
Yes. No signup, no login, no data stored. Enter your numbers and get your margin and markup instantly.
Help someone price their product correctly. Share this calculator.
Crystal writes about money the way most people wish their teachers had plainly, practically, and without assuming you already know what compound interest means. With a background in financial literacy education, she covers percentage calculations, savings growth, loan interest, profit margins, and the everyday maths people avoid because it feels complicated. Her rule: if you need a calculator to explain the calculator, the calculator is broken.
