Profit Margin Calculator
Calculate profit, margin percentage, and markup percentage from cost and revenue.
Margin and markup are two different ratios that both describe profitability, and mixing them up is one of the most common pricing mistakes small businesses make — a 50% markup on cost does not produce a 50% margin on revenue, and pricing a product based on the wrong one can quietly erode profitability.
Margin is profit as a percentage of the selling price (revenue), while markup is profit as a percentage of the cost. Enter your cost price and selling price, and this calculator shows both figures side by side along with the raw profit amount, so you can see exactly how they diverge — the gap widens as margins get larger.
Understanding the difference matters most when setting prices: if you want a 40% margin, you can't just add 40% to your cost — you need to divide cost by (1 − 0.40) instead, which works out to a much larger markup than 40%.
How to use Profit Margin Calculator
- 1
Enter your cost
Input what it costs you to produce or acquire the item.
- 2
Enter your selling price
Input the price you sell it for.
- 3
Compare profit, margin, and markup
All three figures update instantly side by side.
Features
- Shows margin and markup simultaneously to highlight the difference
- Instant recalculation as you adjust either price
- Displays the raw profit amount alongside both percentages
Frequently asked questions
Common mistakes to avoid
- Using markup and margin interchangeably when setting prices, leading to lower actual profitability than intended.
- Adding a percentage markup to cost when the goal was actually a target margin on revenue.
Get new tools in your inbox
One email a month with new tools, guides, and updates. No spam, unsubscribe anytime.