Profit Margin Calculator
Calculate profit margin, markup and profit from cost and price, or find the selling price for a target margin. Free online gross margin calculator.
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Part of the toolkit
How to use Profit Margin Calculator
- 1Choose what you know: cost and price, cost and target margin, cost and markup, or price and margin
- 2Enter the two values and press Calculate
- 3Read the gross margin, markup, profit and selling price — negative results are flagged as a loss — then copy the breakdown
Frequently asked questions
How do you calculate profit margin?▾
Profit margin = (price − cost) ÷ price × 100. An item that costs $60 and sells for $100 has a profit of $40 and a 40% margin.
What is the difference between margin and markup?▾
Margin divides profit by the selling price; markup divides profit by the cost. The same $60 → $100 sale is a 40% margin but a 66.67% markup.
How do I price a product for a target margin?▾
Price = cost ÷ (1 − margin). For a 40% margin on a $60 cost: 60 ÷ 0.6 = $100. Simply adding 40% to the cost ($84) only gives a 28.6% margin.
What is a good profit margin?▾
It depends on the industry. Grocery and retail gross margins are often 20–30%, restaurants 60–70% on food cost, and software 70–90%. Compare with businesses like yours.
Can the margin be over 100%?▾
No. Margin can't exceed 100% because profit can't be larger than the price. Markup has no upper limit — a $10 item sold for $50 has a 400% markup and an 80% margin.
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