How to use this calculator
- Enter or choose revenue (selling price).
- Enter or choose cost.
- The profit margin updates as you type. Use Copy result or Share to keep it.
Formula
Margin % = (Revenue − Cost) ÷ Revenue × 100
- Revenue
- the selling price or sales
- Cost
- the cost of the goods sold
Worked example
- Profit = 200 − 150 = 50.
- Margin = 50 ÷ 200 × 100 = 25%.
- Markup = 50 ÷ 150 × 100 = 33.33%.
A $200 sale costing $150 has a 25% margin, which is a 33.33% markup.
What the result means
Margin is divided by the price, markup by the cost, so for the same sale the markup is always the larger number. A margin can never reach 100%, while a markup can.
Assumptions and limits
- “Cost” means the direct cost of what was sold, giving gross margin.
- For net margin, include operating costs, interest and taxes in “Cost”.
Questions
What is a good profit margin?
It varies widely by industry: grocery retail often runs on low single-digit net margins, while software can have gross margins well above 70%.
How do I get a target margin?
Price = Cost ÷ (1 − target margin). For a 40% margin on a cost of 60, price = 60 ÷ 0.6 = 100.