Profit Margin Calculator
Profit margin tells you how much of each sale you actually keep after covering the cost of the goods or services sold. Enter your cost and selling price and this calculator instantly returns your gross profit, profit margin percentage, and the equivalent markup — so you can price with confidence.
How to use the Profit Margin Calculator
- 1Enter your cost. Type the total cost of the product or service (what you paid to make or acquire it).
- 2Enter your revenue. Type the price you sell it for. Results update automatically as you type.
- 3Read your results. See gross profit in dollars, profit margin as a percentage, and the matching markup percentage.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price, while markup is profit as a percentage of the cost. A 50% markup on a $10 item gives a $15 price and a 33.3% margin. This tool shows both.
How is profit margin calculated?
Profit margin = (Revenue − Cost) ÷ Revenue × 100. For example, a $40 item that costs $25 has a $15 profit and a 37.5% margin.
Is a higher margin always better?
A higher margin means you keep more per sale, but very high prices can reduce sales volume. The right margin balances profitability with what your market will pay.