Free Profit Margin Calculator
Calculate profit margin, markup percentage, and gross profit instantly. Includes formulas and explanations.
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Profit Margin is the percentage of the selling price that is profit. It tells you how much of each dollar of revenue you keep.
Markup is the percentage added to the cost price to get the selling price. It tells you how much you're adding on top of your costs.
For example, if you buy something for $80 and sell it for $100:
- Profit = $100 - $80 = $20
- Margin = $20 / $100 = 20%
- Markup = $20 / $80 = 25%
Profit Margin
Margin = (Selling Price - Cost) / Selling Price × 100Markup
Markup = (Selling Price - Cost) / Cost × 100Selling Price from Target Margin
Selling Price = Cost / (1 - Margin%)Frequently Asked Questions
Margin is the percentage of the selling price that is profit (profit ÷ selling price). Markup is the percentage added to cost to get the selling price (profit ÷ cost). For the same profit, markup is always a higher percentage than margin.
Profit margin = (Selling Price - Cost) ÷ Selling Price × 100. For example, if you sell something for $100 that cost you $80, your margin is ($100 - $80) ÷ $100 = 20%.
Good profit margins vary by industry. Retail typically has 2-5% net margins, while software can have 70%+ gross margins. For small businesses, a gross margin of 50% or higher is generally considered healthy.
Use the formula: Selling Price = Cost ÷ (1 - Margin%). For example, if your cost is $80 and you want a 25% margin: $80 ÷ (1 - 0.25) = $80 ÷ 0.75 = $106.67.
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