📊 Profit Margin Calculator
Margin and markup both measure profitability but from opposite ends: margin is profit as a share of the selling price, markup is profit as a share of cost. Mixing them up is one of the most common pricing mistakes small businesses make.
Enter what an item costs you and what you sell it for. The calculator shows the profit in money terms plus both percentages, so you can price with confidence.
How to use this calculator
Enter what an item costs you and what you sell it for to get the profit, the profit margin and the markup percentage.
- Enter the Cost price you pay for the item.
- Enter the Selling price you charge customers.
- Press Calculate to see the profit, margin and markup.
- Adjust the selling price until the margin hits your target.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price; markup is profit as a share of the cost. They measure the same profit from opposite ends, and mixing them up is a classic pricing mistake.
How are the three figures calculated?
Profit is the selling price minus the cost. Margin is profit divided by the selling price times one hundred. Markup is profit divided by the cost price times one hundred.
Show me a worked example.
With a cost price of $80 and a selling price of $100, the profit is $20, the profit margin is 20%, and the markup is 25%.
Why does the distinction matter in practice?
Because pricing from cost with a target margin needs the margin formula, not markup. To earn a 30% margin on an $80 cost, the price must be about $114.29, not $104, which is what a 30% markup would give.