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Margin calculator

Enter what an item costs you and what you sell it for to see your margin, markup and profit. Or start from the margin you want and get the price to charge. Margin and markup are worked out side by side, so you never mix them up.

What do you know?

What you pay for the item, or what it costs to make.

Before sales tax or VAT.

See revenue and total profit for a batch.

Margin
40%
Profit $40.00 per item · markup 66.67%
Cost
$60.00
Selling price
$100.00
Profit per item
$40.00
Margin (profit ÷ price)
40%
Markup (profit ÷ cost)
66.67%

Prices for a $60.00 cost

20% margin (25% markup)
$75.00
30% margin (42.86% markup)
$85.71
40% margin (66.67% markup)
$100.00
50% margin (100% markup)
$120.00
60% margin (150% markup)
$150.00
  • Nothing is uploaded
  • Free, no sign-up
  • Works on phone and desktop

How to calculate margin

  1. 1

    Choose what you know: cost and price, cost and margin, or price and margin.

  2. 2

    Enter the two numbers. Use the selling price before sales tax or VAT.

  3. 3

    Read the answer: your margin, the price to charge, or the most you can pay for the item.

  4. 4

    Check the markup and the price ladder underneath, and add units sold to see total profit.

Features

  • Margin and markup together

    Every answer shows both, so a 40% margin is never confused with a 40% markup.

  • Price for any margin

    Start from the margin you need and get the exact price to charge, or the most you can pay a supplier.

  • Price ladder

    See the price at 20%, 30%, 40%, 50% and 60% margin for your cost at a glance.

  • Five currencies

    Work in dollars, pounds, euros, Canadian or Australian dollars.

The formulas

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

Say you buy a jacket wholesale for $45 and want a 55% margin. The price is $45 ÷ 0.45 = $100. Your profit is $55, the margin 55% and the markup 122%. If instead you had added 55% to the cost, you would have charged $69.75 and earned only a 35.5% margin.

Margin to markup

MarginSame as a markup of
10%11.11%
20%25%
25%33.33%
30%42.86%
40%66.67%
50%100%
60%150%
75%300%

Markup is always the larger number for the same profit, because the cost it's divided by is smaller than the price.

Why margin matters more than markup

Margin tells you how much of every dollar of sales you keep to pay your overheads and yourself. If your rent, staff and software come to 30% of sales, any product with a margin under 30% loses money once those costs are counted, however healthy its markup looks. That's why most finance teams, investors and lenders talk in margins, while many shops and trades price with a markup because it's quick to apply to a cost.

Margins also move with discounts faster than people expect. Take 20% off a product with a 40% margin and the margin falls to 25%. Check a sale price in the discount calculator, set prices from your cost with the markup calculator, and see the whole business with the profit margin calculator.

Frequently asked questions

How do I calculate profit margin?

Subtract the cost from the selling price to get the profit, then divide the profit by the selling price and multiply by 100. An item that costs $60 and sells for $100 makes $40 profit, a 40% margin.

What is the difference between margin and markup?

Both use the same profit, but margin divides it by the selling price and markup divides it by the cost. The $60 item selling for $100 has a 40% margin and a 66.7% markup. Margin can never reach 100%; markup can go as high as you like.

How do I price an item for a 40% margin?

Divide the cost by (1 − 0.40), which is 0.60. A $60 cost needs a $100 price. A common mistake is adding 40% to the cost: $60 × 1.4 = $84, which is only a 28.6% margin.

Is this gross margin or net margin?

Per item, this is gross margin: price minus the cost of the item. Net margin also takes off rent, wages, marketing, interest and taxes. For the whole picture, use the profit margin calculator with your income statement figures.

Should I include sales tax or VAT in the price?

No. Use the price you actually keep, before sales tax or VAT, because that tax is passed on to the government rather than earned. The VAT calculator can strip VAT out of a gross price first.

What is a good profit margin?

It depends heavily on the industry and the business model. High-volume retail and grocery work on thin margins, while software and services often run much higher. Compare yourself with businesses like yours, and make sure your margin covers your overheads.

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