Profit Margin Calculator
Calculate gross profit, net profit, markup percentage, and profit margins for any product or service.
How to Use the Profit Margin Calculator
- Select Basic Margin for simple cost/sell calculations, Advanced for full P&L, or Markup Calculator to set prices.
- Enter your cost price and selling price (or revenue, COGS, expenses for advanced).
- Click Calculate to see profit, margin percentage, and markup.
- Use the Markup tab to calculate selling price from cost and desired markup percentage.
Formula & Method
Gross Profit:Gross Profit = Revenue - Cost of Goods Sold
Gross Margin:Gross Margin% = (Gross Profit / Revenue) x 100
Net Profit:Net Profit = Revenue - COGS - Expenses - Taxes
Net Margin:Net Margin% = (Net Profit / Revenue) x 100
Markup:Markup% = (Profit / Cost) x 100
Selling Price from Markup:Selling Price = Cost x (1 + Markup%)
Examples
| Scenario | Cost | Sell | Profit | Margin | Markup |
|---|---|---|---|---|---|
| Retail product | $50.00 | $75.00 | $25.00 | 33.3% | 50.0% |
| Restaurant meal | $8.00 | $24.00 | $16.00 | 66.7% | 200.0% |
| Service business | $500 | $1,000 | $500 | 50.0% | 100.0% |
| 50% markup pricing | $40.00 | $60.00 | $20.00 | 33.3% | 50.0% |
Frequently Asked Questions
What is a good profit margin?
It varies by industry. Retail typically sees 20-40% gross margins. Restaurants average 3-5% net margins. Software companies can have 70%+ gross margins. Compare your margins to industry benchmarks.
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. A 50% markup equals a 33.3% margin. Margin is always lower than markup for the same profit amount.
How do I price my product for a 40% margin?
Use the Markup Calculator tab. Enter your cost and set the markup percentage. For a 40% margin, you need a 66.7% markup. Selling Price = Cost / (1 - 0.40) = Cost / 0.60.
People Also Ask
What is the formula for profit margin?
Profit Margin = (Selling Price - Cost Price) / Selling Price x 100. For example, cost $50, sell $75: margin = ($25/$75) x 100 = 33.3%.
What is a 100% markup?
A 100% markup means you double the cost price. Cost $50, sell $100. The profit margin is 50%.
How do you calculate gross margin vs net margin?
Gross margin only subtracts COGS from revenue. Net margin subtracts ALL expenses including operating costs, taxes, and interest.