Find profit margin and markup from cost and selling price, and see the profit per item.
Try an example
Load a ready-made sample into this tool and run it. Every result you see is calculated live by the tool itself — nothing here is a pre-written answer.
Sample: cost: 80; price: 100
How to Use
- Enter the cost per item.
- Enter the selling price.
- Read margin, markup and profit together.
What this profit margin calculator does
This profit margin calculator works from the two figures every sale has — what an item cost and what it sold for — and returns the profit per item, the margin percentage and the markup percentage. Margin is the headline figure: the share of the selling price that is actually profit, which is how profitability is usually compared between products.
The formula
Profit is the selling price minus the cost. Margin divides that profit by the selling price and multiplies by 100; markup divides the same profit by the cost instead. For example, a profit of 20 on a price of 100 is a 20% margin, but the same profit is a 25% markup on its cost of 80.
Good to know
Margin and markup describe the same profit against different bases, so margin is always the lower percentage of the two and can never exceed 100%. If a price is being set from a target margin rather than a markup, do not swap the figures around — the selling price will come out wrong.
Frequently asked questions
Why is my margin lower than my markup?
Margin divides profit by the larger number — the selling price — while markup divides by the smaller cost. Same profit, different base; the gap widens as profit grows, so confusing them can misprice products.
How do I price for a target margin?
Divide the cost by (1 − margin ÷ 100). A 30% target margin, for example, means cost must be 70% of the price. This calculator then verifies the margin a chosen price produces.
Does the calculator include overheads or tax?
No. It uses only the cost and selling price entered, so the cost should be whatever the margin is measured against — product cost alone, or cost plus packaging and fees combined.
How to use Profit Margin Calculator
- Enter the cost per item.
- Enter the selling price.
- Read margin, markup and profit together.
Limitations
Margin divides by selling price while markup divides by cost, so the two percentages differ by design.