Profit Margin Calculator

Calculate gross profit, profit margin and markup from an item's cost and selling price.

$
$
Profit margin
40%

You keep $40.00 of every $100.00 sale.

Selling price
Cost: $60.00 (60%)Profit: $40.00 (40%)40%margin
  • Cost$60.0060%
  • Profit$40.0040%
Profit
$40.00
Markup
66.67%
Show the working
  1. Profit = $100.00 − $60.00 = $40.00
  2. Margin = $40.00 ÷ $100.00 = 40%
  3. Markup = $40.00 ÷ $60.00 = 66.67%

Runs entirely in your browser. Nothing you enter is uploaded.

Formula

Profit = price − costMargin = profit ÷ priceMarkup = profit ÷ cost

How it works

Profit margin tells you what share of each sale you keep as profit. If you sell something for $100 that cost you $60, you keep $40 — a 40% margin. Because margin is measured against the selling price, it can never exceed 100%.

Margin and markup describe the same profit from different starting points. Markup compares profit with cost (the $40 profit is 66.7% of the $60 cost), so it is always the larger number. Mixing the two up is a common pricing mistake: adding a 40% markup gives only a 28.6% margin.

Entering cost of goods sold gives gross margin. To find net margin, include every expense — rent, salaries, marketing, taxes — in the cost figure. Typical gross margins vary widely: grocery stores run on thin margins, while software companies often exceed 70%.

Frequently asked questions

How do I set a price for a target margin?

Divide cost by (1 − target margin). For a 40% margin on a $60 cost: $60 ÷ 0.6 = $100.

What is a good profit margin?

It depends on the industry. A 10% net margin is often considered healthy for a small business, but retail and restaurants frequently run lower and software or consulting higher.

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