Profit Margin & Markup Calculator
Free profit margin and markup calculator — go between cost, selling price, and margin or markup percent. Clears up the margin-vs-markup confusion.
Pick a mode. The calculator works in any of three directions: compute margin and markup from cost and price, find a selling price for a target margin, or back out the cost for a target margin.
Margin vs markup
They are different numbers. People in retail and small business mix them up constantly.
margin = profit ÷ selling price (percentage of the customer price) markup = profit ÷ cost (percentage added on top of cost)
A $60 cost / $100 sale = $40 profit. That’s:
- 40% margin (profit / price)
- 66.67% markup (profit / cost)
Same item, two different ratios. The “40%” you hear can mean either — always confirm which.
The three calculations
profit = price − cost margin = profit ÷ price × 100 markup = profit ÷ cost × 100 price = cost ÷ (1 − margin / 100) cost = price × (1 − margin / 100)
Targeting a 50% margin on a $60 cost? Price = 60 ÷ 0.50 = $120 (not $90, which would be a 50% markup → 33% margin).
Gross vs net
Same formula, different scope of “cost”:
- Gross margin — uses cost of goods sold (COGS) only. The lever on each individual unit.
- Net (profit) margin — uses all costs (COGS, salaries, rent, marketing, tax). The bottom-of-the-P&L number.
The calculator doesn’t pick for you — feed it the cost number whose margin you want to compute.
Worked examples
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Cost 60, price 100
Profit $40.00 · margin 40% · markup 66.67%
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Cost 60, target margin 40% → price 100
Selling price: $100.00
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Price 100, margin 40% → cost 60
Cost: $60.00
Frequently asked questions
What's the difference between margin and markup?
Margin is **profit ÷ selling price** — your percentage of the customer-facing price. Markup is **profit ÷ cost** — how much you added on top of cost. A 40% margin means the customer pays $100 and $40 of that is profit. A 40% markup means a $60 item is sold for $84. They are not the same number, and confusing them is a classic small-business mistake.
How do I go from a target margin to a selling price?
price = cost ÷ (1 − margin/100). Cost $60 with a 40% margin → $60 ÷ 0.60 = $100. Note that this is **not** "cost × 1.4" — that would be a 40% markup, which would land at $84 (33% margin).
How are profit margin and gross margin related?
Same calculation, different scope. Gross margin = (revenue − COGS) ÷ revenue. Net (profit) margin = (revenue − all costs) ÷ revenue. This calculator does the formula; what you feed it (cost = COGS or cost = total cost) decides which margin you're computing.
Can margin be over 100% or negative?
Margin is bounded above by 100% (you can't make more profit than the customer pays). It can be negative if you're selling below cost. The calculator rejects pct ≥ 100% or ≤ −100% in the reverse modes because the formula divides by (1 − margin/100), which would be ≤ 0.
What currency does it use?
Whatever your locale prefers — USD on the English page, BRL on the Portuguese page. The math is currency-agnostic; only the display label changes.
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