📐 Profit Margin Calculator

Calculate profit margin and markup from cost and selling price.

About this tool

Calculates profit, profit margin (profit as a percentage of selling price), and markup (profit as a percentage of cost) from a cost price and a selling price — two related but genuinely different numbers that get mixed up constantly.

Showing both side by side makes the difference concrete: margin is always a smaller percentage than markup for the same sale, except at 0%.

Worked example

An item costing $40 sold for $60 has a $20 profit, a 33.3% margin, and a 50% markup — same sale, two different percentages.

How to use it

Enter what the item cost you.
Enter what you sold it for.
Press Calculate margin to see profit, margin %, and markup % together.

Tips

Margin and markup are never the same number (except at 0%) — margin is profit ÷ selling price, markup is profit ÷ cost. Mixing them up is a common pricing mistake.
If you're setting a price to hit a target margin, use the Markup Calculator instead — it solves for the missing price.
Margin is generally the more useful figure for assessing overall business profitability.

FAQ

What's the difference between margin and markup?

Margin is profit divided by selling price; markup is profit divided by cost. For the same transaction, markup is always a larger percentage than margin.

If I want a 30% margin, is that the same as a 30% markup?

No — a 30% margin on a $100 sale means $30 profit, requiring a cost of $70 (about 42.9% markup). They only match at 0%.

Which one should I use for pricing decisions?

Margin is usually more useful for assessing overall profitability against revenue; markup is more common for straightforward retail pricing from a known cost.

From the blog: getting the most out of this tool

We built this side by side with the Markup Calculator on purpose — margin and markup answer different questions ("how profitable was this sale" vs "how much did I add on top of cost"), and seeing both from the same two inputs is the fastest way to internalize the difference.

If you already know your desired margin and need to work out what price to charge, flip over to the Markup Calculator, which solves in the other direction.

📖 Want the fuller explanation?

See Percentages Explained for the reasoning behind this calculation, with worked examples.