Profit Margin Calculator

Calculate profit margin, markup percentage, and profit from cost and selling price. Understand your pricing instantly.

Last updated: June 1, 2026

Cost Price

Selling Price (Revenue)

What is Profit Margin Calculator?

A profit margin calculator determines the percentage of revenue that becomes profit after accounting for costs. It calculates gross margin ((revenue - cost) / revenue × 100), which is the most fundamental metric in business. Understanding margins helps you price products correctly, evaluate business health, compare profitability across products or services, and make informed decisions about which offerings are worth pursuing. A healthy margin varies by industry — retail typically operates at 2-10%, software at 60-80%, and services at 15-40%.

How It Works

Enter revenue (selling price) and cost. The tool calculates margin percentage, markup percentage, and gross profit. Margin = (Revenue - Cost) / Revenue × 100. Markup = (Revenue - Cost) / Cost × 100. These are often confused: a product bought for $60 and sold for $100 has a 40% margin but a 66.7% markup. The tool shows both clearly. You can also reverse-calculate — enter a target margin to find the required selling price, or enter cost and selling price to find the margin.

Common Use Cases

•Determining selling prices that achieve target profit margins for new products
•Evaluating whether current pricing generates acceptable margins after all costs
•Comparing margins across product lines to identify most and least profitable items
•Calculating the impact of cost increases on margins without changing selling price
•Converting between margin and markup for conversations with different business stakeholders
•Setting minimum acceptable margins for sales team discount authority and negotiation limits