Margin Calculator
Find your profit margin from cost and price, or the price you need to charge for a target margin.
How to use the Margin Calculator
- Choose the i know the.
- Enter the cost.
- Enter the selling price.
- Enter the target gross margin.
- Press Calculate. The result updates automatically as you type.
About the Margin Calculator
Margin and markup describe the same profit from two angles. Margin is profit as a share of the selling price; markup is profit as a share of the cost. Because the price is always larger than the cost, margin is always the smaller number, and confusing the two is one of the most common pricing mistakes in small businesses.
If you need a 40% margin, adding 40% to cost is not enough: $60 + 40% = $84, which is only a 28.6% margin. The correct price is $60 ÷ 0.6 = $100. Use the target-margin mode to get this right every time.
Gross margin ignores overhead such as rent and salaries; net margin subtracts those too. Results are estimates, not financial advice.
Formula
Gross profit = Price − Cost
Margin = Gross profit ÷ Price × 100%
Price for a target margin = Cost ÷ (1 − Margin)
Markup = Gross profit ÷ Cost × 100%
Example: cost $60, price $100 gives $40 profit, a 40% margin and a 66.67% markup.
Example calculation
Using the default values:
- I know the = Cost and selling price
- Cost = $60
- Selling price = $100
the calculator returns:
- Gross margin: 40%
- Selling price: $100.00
- Gross profit: $40.00
- Markup: 66.67%
Frequently asked questions
What is the difference between margin and markup?
Margin divides profit by price; markup divides profit by cost. A 50% markup equals a 33.3% margin.
What is a good profit margin?
It varies widely by industry. Grocery retailers often run gross margins near 25–30%, while software can exceed 70%.
Can margin be over 100%?
No. Margin is capped below 100% because profit can never exceed the selling price. Markup, however, can be any size.
Last updated: · Category: Financial calculators