Skip to content
Toolify
Business

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.

  • Free — no sign-up
  • Private — runs in your browser
  • Instant results
Gross profit
—
Profit margin
—
Markup
—

How to use the Profit Margin Calculator

  1. 1Enter your cost. Type the total cost of the product or service (what you paid to make or acquire it).
  2. 2Enter your revenue. Type the price you sell it for. Results update automatically as you type.
  3. 3Read your results. See gross profit in dollars, profit margin as a percentage, and the matching markup percentage.

Examples

A product that costs $60 and sells for $100

Input
Cost: $60
Revenue: $100
Result
Gross profit: $40
Profit margin: 40%
Markup: 66.7%

You keep $40 of every $100 sale, which is a 40% margin. Notice the markup (66.7%) is a bigger number than the margin (40%) even though it's the exact same profit — because markup is measured against the lower cost, not the higher price.

A service billed at $2,000 with $500 of costs

Input
Cost: $500
Revenue: $2,000
Result
Gross profit: $1,500
Profit margin: 75%
Markup: 300%

High-margin service work: 75% of the fee is profit after direct costs. Margins like this are common for consulting and software, where the main cost is time rather than materials.

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.