Profit Margin Calculator
Calculate margin, markup and the price you need to charge.
Profit margin
40.00%
Profit of 40.00 per unit
Gross profit
40.00
Markup on cost
66.67%
Cost as share of price
60.00%
Margin = (revenue − cost) ÷ revenue × 100 = (100.00 − 60.00) ÷ 100.00 × 100
- Margin is 40.0% but markup is 66.7% — quoting one when you mean the other is a common cause of underpricing.
- This is gross margin. Overheads, salaries and tax come out of it before you see net profit.
What does Profit Margin Calculator do?
Enter cost and selling price to get gross profit, profit margin and markup — three numbers that are routinely confused with each other. You can also work backwards to find the price that hits a target margin.
How to Use Profit Margin Calculator
- 1Enter the costWhat the item costs you, including landed costs if relevant.
- 2Enter the selling priceOr switch modes and enter a target margin instead.
- 3Read margin and markupBoth percentages are shown so you can quote correctly.
Key Features
- Gross profit, margin percentage and markup percentage from one entry
- Reverse mode: find the price needed for a target margin
- Explains the difference between margin and markup with the same numbers
- Optional quantity to show total profit as well as per-unit profit
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 cost. An item costing 100 and selling for 150 has a 33.3% margin but a 50% markup. Quoting one when you mean the other is a common source of underpricing.
How do I calculate profit margin?
Margin = (revenue − cost) ÷ revenue × 100. For a £150 sale on a £100 cost: 50 ÷ 150 × 100 = 33.3%.
What price do I need for a 40% margin?
Divide the cost by (1 − margin ÷ 100). A £60 cost at a 40% target margin needs a price of 60 ÷ 0.6 = £100. The reverse mode does this for you.
Is this gross or net margin?
Gross. It uses the direct cost of the item only. Net margin also subtracts overheads, salaries, marketing and tax, and will always be lower.
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