Margin, markup and profit from cost and price — with profit-margin formulas explained.
Margin and markup are not the same thing — margin is profit as a share of the selling price, markup is profit as a share of the cost. This margin calculator shows both, so you never mix them up.
The selling prices below are worked out from your cost price above, so you can price a product to hit an exact margin or markup.
profit margin
How to use this tool
Type what the item costs you and what you sell it for. This margin calculator instantly shows your profit per unit, your profit margin and your markup — the three numbers every seller needs.
Margin is profit as a share of the selling price; markup is profit as a share of the cost. On a $60 cost and $100 price, the profit margin is 40% but the markup is 66.67% — same $40 profit, different denominator.
Open Advanced options and set a target profit margin or markup. The calculator gives the exact selling price that hits it from your cost, so you can price a whole range consistently.
Copy the margin, markup and profit figures for a quote, a price list or your accounts.
Formula & worked example
Worked example: you buy an item for $60 and sell it for $100. Profit = $100 − $60 = $40. Using the profit margin formula: $40 ÷ $100 = 40% profit margin. Markup = $40 ÷ $60 = 66.67%. Going the other way, a $60 cost priced for a 40% margin is $60 ÷ (1 − 0.40) = $100. That is how to calculate profit margin — and why a '40% markup' is not a 40% margin: a 40% markup on $60 is $84, which is only a 28.57% margin.
Limitations — read this before you rely on it
This calculator works on one unit price at a time. It does not include VAT or sales tax, shipping, payment fees, discounts, returns, or fixed overheads like rent and wages — for a true business margin, subtract those costs from the profit first. A negative margin simply means you are selling below cost.
Frequently asked questions
Margin is profit divided by the selling price; markup is profit divided by the cost. On a $60 cost and $100 price, profit is $40, margin is 40% and markup is 66.67%. Markup is always higher than margin for the same sale (except at 0%).
Use the profit margin formula: (selling price − cost) ÷ selling price × 100. For example, ($100 − $60) ÷ $100 × 100 = 40%. This calculator does it instantly and also shows the markup so you can compare.
It depends entirely on the industry: grocery retail often runs on single-digit margins, while software and luxury goods can exceed 50%. Compare with businesses like yours, and remember that margin must cover all your other costs, not just the cost of the item.
Divide the cost by (1 − margin): $60 ÷ (1 − 0.40) = $100. Do not just add 40% to the cost — that gives $84, which is a 40% markup but only a 28.57% margin. Use the target-margin box above.
Gross margin usually means (revenue − cost of goods sold) ÷ revenue, which is the same formula applied to a whole business rather than one item. Net profit margin goes further and subtracts all operating costs, tax and interest. This calculator gives the per-item version, which is the starting point for both.