Profit Margin Calculator

Margin is profit as a share of the selling price; markup is profit as a share of the cost. Enter a cost and price to see both, or a cost and target margin to find the price.

Margin from cost and price

Gross margin40%
Profit per unit
40.00
Markup on cost
66.6667%

Working

  1. Profit = price − cost = 100.00 − 60.00 = 40.00
  2. Margin = profit ÷ price = 40.00 ÷ 100.00 = 40%
  3. Markup = profit ÷ cost = 40.00 ÷ 60.00 = 66.6667%

Price for a target margin

Selling price100.00
Profit per unit
40.00
Equivalent markup
66.6667%

Working

  1. Price = cost ÷ (1 − margin) = 60.00 ÷ (1 − 0.4) = 100.00

Formulas

profit = price − cost

margin = profit ÷ price

markup = profit ÷ cost

price for a target margin = cost ÷ (1 − margin)

Worked example

Cost 60, target margin 40%

  1. Price = 60 ÷ (1 − 0.40) = 60 ÷ 0.60 = 100
  2. Profit = 100 − 60 = 40
  3. Check: 40 ÷ 100 = 40% margin; markup 40 ÷ 60 = 66.67%

Sell at 100.

Margin vs markup

The same price expressed both ways
Markup on costGross margin
10%9.09%
25%20%
33.33%25%
50%33.33%
66.67%40%
100%50%
150%60%
300%75%

A common mistake is adding a 40% markup when a 40% margin was intended: 60 + 40% = 84, which is only a 28.6% margin. Margin can never reach 100% unless the cost is zero; markup has no upper limit.