Profit Margin Calculator
Business ToolsWork out margin, markup and profit from cost and price.
Runs entirely in your browser — nothing is uploaded
Features
- Solve for price, margin or markup from any two known values.
- Shows gross profit alongside both percentage measures.
- Reverse mode: find the price needed to hit a target margin.
- Explains the difference between margin and markup inline.
How to use the Profit Margin Calculator
- 1Enter your cost and either a selling price or a target margin.
- 2Read the resulting profit, margin and markup.
- 3Adjust the price until the margin matches your target.
Frequently asked questions
Margin versus markup — what is the difference?
Margin is profit as a share of the selling price; markup is profit as a share of cost. A 50% markup is only a 33.3% margin.
Why does a 50% markup not produce a 50% margin?
They are percentages of different things. Markup is profit measured against cost; margin is profit measured against price. A cost of 100 with a 50% markup gives a price of 150 and a profit of 50, which is 33.3% of the price. So a 50% markup is a 33.3% margin, and confusing the two is one of the more expensive arithmetic mistakes in small business.
Should the cost figure include GST?
Work in amounts excluding GST on both sides. Tax paid on inputs is generally recoverable as input tax credit, so including it overstates your cost and understates your margin. Use the GST Calculator to strip tax out of a tax-inclusive figure first.
What margin should I be aiming for?
There is no universal answer, and any figure quoted as one should be treated carefully. Grocery retail runs on low single digits; software runs on numbers that would be implausible in most trades. The comparisons worth making are against your own history and against others selling the same thing. What this tool is for is making sure you know which of the two measures you are quoting.