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
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
| Markup | Margin | Price 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 margin | Markup needed | Price 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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