Key takeaways
- Profit Margin Calculator works out profit, margin percentage and markup percentage from your cost and selling price.
- It also works backward: tell it your cost and target margin, and it tells you what price to charge.
- Margin and markup are often confused — margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. They give different numbers for the same sale.
Using it
Open Profit Margin Calculator, enter your cost and either your selling price (to see the resulting margin) or your target margin (to see the price you'd need to charge).
Margin vs markup — the mix-up that costs people money
A 50% markup on a $100 cost gives a $150 price — but that's a 33% margin, not 50%, because margin is calculated against the selling price ($50 profit / $150 price), not the cost. Pricing based on the wrong one of these two numbers is a common, easy-to-make mistake, and this tool shows both at once so you can check which figure you actually meant.
Frequently asked questions
Which one should I use for pricing decisions?
Margin is generally the more useful figure for understanding actual profitability relative to revenue, since it's calculated against the selling price — but which matters more depends on how your industry typically talks about pricing.
Does it account for other costs like shipping or fees?
Include those in the 'cost' figure you enter if you want them reflected in the margin — the calculator works from whatever cost number you provide.