Profit Margin Calculator

Calculate gross profit margin and markup percentage.

Last updated: 14 August 2026

Processed locally — your files are not uploaded to any server.

Comprehensive Guide & Specifications

Everything you need to know about using Profit Margin Calculator effectively.

What is Profit Margin Calculator and Why Use It?

Margin and markup describe the same gap between what something costs you and what you sell it for, measured from opposite ends: margin expresses profit as a share of the selling price, markup as a share of the cost. This takes your cost and price and reports the gross profit alongside both percentages, which is precisely what makes it useful — the two numbers are routinely confused, and a 50% markup is a 33.3% margin, so treating them as interchangeable is a reliable way to underprice a product. Small retailers, freelancers quoting work and anyone setting a price list are the people this is for. Note the scope: this is gross margin only. Overheads, salaries, rent and tax all sit below it, so a healthy-looking gross margin is not the same as the business making money, and pricing decisions need the wider picture.

Step-by-Step Instructions

1
Enter your cost of goods sold (COGS) and desired selling price.
2
Or enter your cost and target profit margin to auto-calculate price.
3
Review your gross profit margin, markup percentage, and net revenue.

Formula / Calculations Explained

Gross Margin and Markup Percentage Formulas

Gross Margin = ((Revenue - Cost) / Revenue) × 100

MarginProfit as a percentage of total selling price

MarkupProfit as a percentage of cost of goods sold

Differentiates between profit margin (percentage of revenue kept as profit) and markup (percentage added onto production costs to set retail prices).

Important Considerations

Margin and markup are not interchangeable: a 50% markup is a 33.3% margin. Confusing them is a reliable way to underprice.
This is gross margin only — it excludes overheads, salaries and tax, so it is not your actual profit.

Frequently Asked Questions

What is the key difference between profit margin and markup?▼

Margin is profit divided by selling price, while markup is profit divided by cost. A 50% markup results in a 33.33% profit margin.

What is considered a healthy profit margin in business?▼

A 10% net profit margin is considered average across industries, while 20% or higher is considered high and financially robust.

Are my proprietary business costs safe?▼

Yes. All business figures stay private in your browser with zero cloud storage or logging.

Worked example

Example only — not financial advice

Selling a product for $80 that cost $50 yields a gross profit of $30. The profit margin represents profit as a percentage of the selling price: (Gross Profit ÷ Selling Price) × 100, which is ($30 ÷ $80) × 100 = 37.50%. The cost markup represents profit as a percentage of the cost: (Gross Profit ÷ Cost Price) × 100, which is ($30 ÷ $50) × 100 = 60.00%.

Worked example: Selling an item for $80 that cost $50
Example input	Value
Cost price	$50
Selling price (revenue)	$80
Gross profit	$30
Profit margin	37.50%
Cost markup	60.00%

These figures illustrate how the Profit Margin Calculator computes its result for the example inputs above — they are not a rate offer, a market quote, or a recommendation for your own numbers. Enter your own figures in the calculator above to get a result that applies to you.

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