Profit Margin Calculator
Enter your cost and selling price to instantly see profit, profit margin, and markup percentage.
- Profit
- $25.00
- Profit margin
- 25.00%
- Markup
- 33.33%
Margin is profit as a share of the selling price; markup is profit as a share of cost. A $75 cost sold for $100 is a 25% margin but a 33.33% markup.
How profit margin works
Profit is simply selling price minus cost. From that one number you get two percentages that often get confused. Margin divides profit by the selling price; it tells you what share of each sale you keep. Markup divides profit by the cost; it tells you how much you added on top of what you paid.
On a $75 cost sold for $100, you make $25. That is a 25% margin (25 ÷ 100) but a 33.33% markup (25 ÷ 75). Pricing from markup and reporting on margin is the most common mix-up for new businesses — this calculator shows both so they never drift apart.
Need to price up from cost instead? Try the markup calculator or browse all finance tools.
FAQ
What is the difference between margin and markup?▾
Margin is profit as a percentage of the selling price; markup is profit as a percentage of cost. A $75 cost sold for $100 is a $25 profit — a 25% margin but a 33.33% markup. The same dollar profit looks bigger as a markup because cost is smaller than price.
How do I calculate profit margin?▾
Subtract cost from selling price to get profit, then divide profit by the selling price and multiply by 100. For a $75 cost and $100 price: ($100 − $75) ÷ $100 × 100 = 25%.
What is a good profit margin?▾
It varies by industry. Software and digital products often run 70%+ gross margins, while retail and food businesses may run 10–30%. Compare against typical margins in your sector rather than an absolute number.
Does this calculator include taxes or overhead?▾
No. It works out gross profit from a single cost and price. Operating expenses, taxes, shipping, and payment fees are not included — subtract those separately to get net profit.
Can I use it to set a selling price from a target margin?▾
Adjust the selling price until the margin shows your target. To hit a margin directly from cost, use price = cost ÷ (1 − margin). For a 40% margin on a $75 cost, charge $75 ÷ 0.60 = $125.