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Profit margin calculator

Work out your profit margin and markup from cost and price, or find the selling price you need for a target margin. Free, with no sign-up.

What do you want to work out?

Use any currency. Cost means everything it takes to make or buy one unit.

Selling price
100.00
Profit
20.00
Margin
20%
Markup
25%

How it's worked out

Profit = 100.00 − 80.00 = 20.00
Margin = profit ÷ price = 20%
Markup = profit ÷ cost = 25%

Margin and markup formulas

  • Profit = selling price − cost
  • Margin = profit ÷ selling price × 100
  • Markup = profit ÷ cost × 100
  • Price for a target margin = cost ÷ (1 − margin ÷ 100)
  • Price for a markup = cost × (1 + markup ÷ 100)

Markup and margin side by side

MarkupMargin
10%9.09%
20%16.67%
25%20%
50%33.33%
100%50%
200%66.67%

What counts as a good margin?

It depends heavily on the business. Services and digital products often run high margins because each extra sale costs little, while retail and food usually run much lower. Rather than chasing a number, make sure your margin covers your overheads, like rent, wages and software, with room left for profit.

Next steps

Found your price? Send a quotation or an invoice, and use the GST or VAT calculator to add tax.

Questions

What's the difference between margin and markup?
Both measure profit, but against different things. Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. Buying at 80 and selling at 100 gives a 20 profit: that's a 20% margin but a 25% markup.
How do I calculate profit margin?
Margin = (selling price − cost) ÷ selling price × 100. For a cost of 80 and a price of 100: (100 − 80) ÷ 100 × 100 = 20%.
How do I find the price for a target margin?
Price = cost ÷ (1 − margin ÷ 100). For a cost of 80 and a 20% margin: 80 ÷ 0.8 = 100. Adding 20% to the cost (96) is a common mistake, which gives a margin of only about 16.7%.
Why can't my margin be 100% or more?
Margin is a share of the selling price, and profit can never be bigger than the whole price. Markup has no such limit: selling something for three times its cost is a 200% markup, but only a 66.67% margin.
Should I include tax in the cost and price?
Work out margins without GST or VAT, since the tax isn't your money. Use prices before tax on both sides.

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