Profit Margin Calculator

Margin is the single number that decides whether a sale actually makes money, and getting it right starts with not confusing the two percentages people use. This free profit margin calculator takes a cost and a selling price and returns three things: the gross profit in currency, the profit margin as a percentage of revenue, and the markup as a percentage of cost. Gross profit margin is calculated as (revenue minus cost) divided by revenue, times 100. Markup is calculated as (revenue minus cost) divided by cost, times 100. They measure the same profit from different starting points, which is exactly why they are so easy to mix up: an item that costs 80 and sells for 100 has a 20% margin but a 25% markup. Quoting a 25% markup when a client expects a 25% margin can quietly erode your profit. Seeing both at once removes that ambiguity. The calculator is most useful when you work backward from a target. If you need a 40% margin and your cost is 60, the correct selling price is cost divided by (1 minus the margin), or 60 / 0.60 = 100, not simply cost plus 40%. Use the tool to test price points, check whether a planned discount still leaves an acceptable margin, and compare products to find the most profitable lines. Note that this is a gross margin figure: it does not subtract overhead, taxes, shipping, or operating expenses, so it shows the margin on the sale itself rather than net profit. All calculation runs locally in your browser, so your cost and pricing figures stay on your device.