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Profit Margin Calculator

Enter what an item costs you and what you sell it for. You get the margin, the profit and the equivalent markup in one go.

Quick answer

Margin = (price − cost) ÷ price × 100. An item that costs $30 and sells for $50 has a 40% margin and a 66.7% markup. To price from cost instead, use the markup calculator; to see how many sales cover your fixed costs, use the break-even calculator.

  • Free
  • No sign-up
  • Business
  • Updated October 2026

What the item costs you (COGS).

Gross margin

40%

Gross profit
$20.00
Markup
66.67%
Show the working
  1. Profit = $50.00 − $30.00 = $20.00
  2. Margin = $20.00 ÷ $50.00 × 100 = 40%

About the Profit Margin calculator

Profit margin tells you how much of every sale you keep after paying for the product itself. A 40% margin means that out of every $100 of revenue, $40 is gross profit and $60 went to the cost of the goods.

Margin is the number lenders, investors and most accounting software report, because it is measured against revenue. Markup is measured against cost, which is why the same price change produces two different percentages. This calculator shows both side by side so you never mix them up.

How to use it

  1. Choose your currency.
  2. Enter the cost of the item (what you pay your supplier, or your cost to make it).
  3. Enter the selling price.
  4. Read the gross margin, gross profit and markup. Open “Show the working” to see the arithmetic.

The formula

Margin % = (Price − Cost) ÷ Price × 100

  • Gross profit = Price − Cost.
  • Markup % = (Price − Cost) ÷ Cost × 100 — same profit, divided by cost instead of price.
  • A margin can never reach 100% (that would mean the product cost nothing), but a markup can be any size.

Worked example

A $50 product that costs $30

  1. Profit: $50 − $30 = $20.
  2. Margin: $20 ÷ $50 = 0.40 → 40%.
  3. Markup: $20 ÷ $30 = 0.667 → 66.7%.

Frequently asked questions

What is a good profit margin?

It depends heavily on the industry. Grocery and fuel retailers often run gross margins in the low double digits, while software, cosmetics and handmade goods can exceed 60%. Compare against businesses with a similar cost structure rather than a single “good” number.

What is the difference between margin and markup?

Both use the same profit figure. Margin divides it by the selling price; markup divides it by the cost. A 50% markup equals a 33.3% margin, and a 50% margin equals a 100% markup.

Is this gross or net margin?

Gross margin. It only subtracts the direct cost of the item. Net margin also subtracts overheads like rent, salaries, advertising and tax, so it is always lower.

How do I find the price for a target margin?

Divide cost by (1 − target margin). For a $30 cost and a 40% target margin: $30 ÷ 0.60 = $50.

Results are estimates for planning — check critical figures with a professional or the official source.

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