Profit Margin Calculator
Turn cost and selling price into profit, margin and markup.
Margin and markup sound similar but measure different things. Enter your cost and selling price to get the profit, the profit margin (a share of the price) and the markup (a share of the cost) at once.
Formula / method
Examples
60% margin
30% margin
Margin and markup are not the same
Margin and markup both describe the gap between cost and price, but against different bases. Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. The same 40 profit on a 100 sale is a 40% margin, but a larger markup relative to a 60 cost.
Why the distinction matters for pricing
Confusing the two leads to underpricing. If you want a 40% margin, marking the cost up by 40% is not enough — it yields a smaller margin, because markup is measured on the lower cost figure. This tool shows profit, margin and markup together so you can price with the number you actually mean.
Where it's used
- Setting a retail selling price from wholesale cost plus a target markup
- Checking whether a product's profit margin meets a business goal
- Converting between markup and margin when quoting clients versus reporting profit
- Pricing restaurant menu items to hit a target food-cost percentage
- Testing whether a planned discount still leaves an acceptable margin
Real-world examples
- A boutique buying shirts at $20 and applying a 50% markup to sell at $30
- A cafe paying $2.50 for ingredients and selling a dish at $10, a 75% margin
- A reseller seeing that a $40 item sold for $60 is a 50% markup but a 33% margin
- A freelancer marking up $500 of subcontracted work by 20% to bill $600
Did you know?
Markup and margin are not the same number: a 50% markup on cost equals only about a 33% profit margin on the selling price, which is why quoting one when you mean the other can quietly erode profit.
FAQ
What is the difference between margin and markup?
Margin is profit as a percent of the selling price; markup is profit as a percent of the cost. Same profit, different base.