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Profit Margin and Markup Calculator

Enter your cost and selling price to get profit, margin and markup. Add a target margin to see the price that achieves it.

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Gross margin

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Markup
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Profit per unit
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Price for target margin
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Tips for using the profit margin calculator

  • Price from target margin, not markup, if your financial goals are set as margins.
  • Include shipping, packaging and payment fees in cost.
  • Typical gross margins vary widely: groceries run about 25% to 30%, software often 70% to 90%.

How the profit margin calculator works

Margin and markup both describe profit, but against different bases. Margin is profit as a share of the selling price; markup is profit as a share of cost. Mixing them up is a common pricing mistake.

Profit = Price − Cost
Margin = Profit ÷ Price
Markup = Profit ÷ Cost
Price for target margin = Cost ÷ (1 − margin)

A 50% markup is only a 33.3% margin, and a 50% margin requires a 100% markup. Margin can never reach 100%, while markup has no upper limit. Gross margin uses only the direct cost of the goods; net margin would also subtract overhead, salaries and taxes.

Worked example

An item costs $60 and sells for $100. Profit is $40, the margin is 40% and the markup is 66.67%. To reach a 50% margin on the same item, you would need to price it at 60 ÷ 0.5 = $120.

Frequently asked questions

What is the difference between margin and markup?

Margin divides profit by price; markup divides profit by cost. A $40 profit on a $100 sale is a 40% margin and a 66.7% markup.

How do I convert markup to margin?

Margin = Markup ÷ (1 + Markup). A 25% markup is a 20% margin.

What is a good profit margin?

It depends on the industry. Compare with peers in your sector.

How do I price for a target margin?

Divide cost by (1 − target margin). For a 40% margin on a $30 cost, price at $50.

Updated October 2026. Results are estimates for education, not financial or medical advice. All math runs in your browser; nothing you type is sent anywhere.

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