Profit Margin Calculator
NewCalculate profit margin percentage from cost and selling price, or find the selling price needed to hit a target margin — margin is always a percentage of selling price, distinct from markup (a percentage of cost).
Profit margin is a percentage of the selling price (margin% = (price − cost) / price × 100) — different from markup, which is a percentage of cost. A $50 cost item sold for $70 has a 28.57% margin but a 40% markup, since $20 profit is 28.57% of $70 but 40% of $50.
Frequently Asked Questions
Why is my margin percentage lower than my markup percentage would be for the same sale?
Margin divides profit by the (larger) selling price, while markup divides the same profit by the (smaller) cost — dividing by a bigger number always gives a smaller percentage, so margin is mathematically always lower than markup for any profitable sale.
How does the "from target margin" mode work?
Given a cost and a desired margin percentage, it solves for the selling price using price = cost ÷ (1 − margin%), then shows the resulting profit amount — useful when you know your desired profitability and need to find what price achieves it.
What happens if I enter a target margin of 100% or more?
The tool shows an error, since a margin of 100% or more would require an infinite or negative selling price — no finite price can produce 100% profit margin on an item with a nonzero cost.
Is this the same as "gross margin" used in financial statements?
Yes — gross margin, gross profit margin, and profit margin (as used here on a per-item basis) all refer to the same calculation: (revenue − cost of goods sold) ÷ revenue.
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