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Profit Margin Calculator

Margin calculator: gross, operating and net margin, markup and profit from cost and price, or the selling price for a target margin or markup. How it works

Use the Profit Margin Calculator

Operating and net profit (optional)

Costs for one unit sold beyond the cost above. Leave both blank for the gross figures only.

Selling price from cost and a target

Uses the cost above.

Selling price $133.33

Price = cost ÷ (1 − margin) = $100.00 ÷ (1 − 0.25) = $133.33

Profit $33.33, which is a 33.33% markup.

Selling price $150.00

Price = cost × (1 + markup) = $100.00 × (1 + 0.5) = $150.00

Profit $50.00, which is a 33.33% margin.

Gross margin
33.33%
Markup 50.00% · Profit $50.00

How it is worked out

  • Margin = (price − cost) ÷ price = ($150.00 − $100.00) ÷ $150.00 = 33.33%
  • Markup = (price − cost) ÷ cost = ($150.00 − $100.00) ÷ $100.00 = 50.00%

Margin divides the profit by the selling price; markup divides it by the cost, so the same sale has a larger markup than margin. For example, a 50% markup is a 33.33% margin.

About the Profit Margin Calculator

Margin is profit divided by the selling price, and markup is profit divided by cost. An item that costs $100 and sells for $150 makes $50.00, which is a 33.33% margin and a 50.00% markup. The margin calculator also works backward from a cost to the selling price for a target margin or markup.

Markup to margin

MarkupMarginPrice on a $100 cost
10%9.09%$110.00
15%13.04%$115.00
20%16.67%$120.00
25%20.00%$125.00
30%23.08%$130.00
40%28.57%$140.00
50%33.33%$150.00
60%37.50%$160.00
75%42.86%$175.00
100%50.00%$200.00

Margin = markup ÷ (100 + markup) × 100. A markup is always larger than the margin it produces.

Selling price for a target margin

Target marginMarkup neededPrice on a $100 cost
10%11.11%$111.11
15%17.65%$117.65
20%25.00%$125.00
25%33.33%$133.33
30%42.86%$142.86
35%53.85%$153.85
40%66.67%$166.67
50%100.00%$200.00
60%150.00%$250.00
75%300.00%$400.00

Price = cost ÷ (1 − margin). Markup = margin ÷ (100 − margin) × 100.

Frequently asked questions

What is the difference between margin and markup?
Both start from the same profit. Margin divides it by the selling price and markup divides it by the cost. Selling a $12 item for $20 makes $8.00: that is a 40.00% margin and a 66.67% markup.
How do I calculate profit margin?
Subtract the cost from the selling price and divide by the selling price. ($150 − $100) ÷ $150 = 33.33%. This is the gross margin on the item: overhead, tax and other costs are not deducted unless you include them in the cost.
What markup gives a 50% margin?
A 100.00% markup, which is double the cost. A 25% margin needs a 33.33% markup and a 40% margin needs 66.67%.
How do I price a product for a 30% margin?
Divide the cost by 0.7. A $40 cost gives $57.14. Multiplying the cost by 1.3 gives $52.00, which is a 30% markup and a 23.08% margin.
Can a margin be 100% or negative?
A margin reaches 100% only when the cost is zero, so the target margin field takes 0% up to just under 100%. Selling below cost gives negative figures: a $100 cost sold for $80 is a -25.00% margin, a -20.00% markup and a -$20.00 profit.
What is the difference between gross, operating and net margin?
Gross margin uses only the cost of the item. Operating margin also takes off operating expenses such as rent and wages per unit, and net margin takes off everything else as well, such as interest and tax. A $150 sale on a $100 cost with $10 of operating and $5 of other expenses is 33.33% gross, 26.67% operating and 23.33% net.

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