Margin Calculator
Find out how much of each sale is profit. Enter your cost and selling price to get the profit margin, or enter your cost and the margin you want to get the price to charge.
Profit margin
40.00%
Check the highlighted fields to see your result.
- Profit
- 40.00
- Markup
- 66.67%
Results are estimates for information only and do not constitute financial, medical, or legal advice.
What the profit margin is
The profit margin is the share of the selling price that you keep as profit. A 40% margin means that out of every 100 you sell, 40 is profit and 60 covers the cost.
The calculator works in two directions: from cost and price it gives the margin, and from cost and a target margin it gives the selling price. It also shows the profit and the equivalent markup.
The formulas
Margin = (price − cost) ÷ price × 100
Price = cost ÷ (1 − margin ÷ 100)
Worked example
A product costs you 60 and you sell it for 100.
- Profit: 100 − 60 = 40
- Margin: 40 ÷ 100 = 0.40 = 40%
- Markup: 40 ÷ 60 = 0.6667 = 66.67%
The other way around: to get a 40% margin on a cost of 60, the price must be 60 ÷ (1 − 0.40) = 60 ÷ 0.60 =100. Adding 40% to the cost (60 × 1.40 = 84) would only give a 28.57% margin.
Frequently asked questions
What's the difference between margin and markup?
Both compare profit with something else. Margin compares profit with the selling price; markup compares it with the cost. Buying at 60 and selling at 100 gives a profit of 40: a 40% margin (40 ÷ 100) but a 66.67% markup (40 ÷ 60).
Can a margin be higher than 100%?
No. The margin is profit divided by price, and the profit can never be bigger than the price unless the cost is negative. As the margin gets close to 100%, the price needed grows without limit, which is why the calculator only accepts margins below 100%.
Is this gross margin or net margin?
If you enter only the cost of the product, the result is the gross margin. To get a net margin, the cost must include every expense, such as shipping, fees, rent, and salaries.
Should I include sales tax or VAT?
Use the cost and the price without taxes. Sales tax or VAT is collected for the government and is not part of your profit.