What is the Profit Margin Calculator?
The Profit Margin Calculator computes gross profit, margin percentage, and markup percentage from your cost and selling price, or works in reverse to find the selling price needed to hit a target margin.
How to Use This Profit Margin Calculator
- Choose "Calculate Margin" if you know your cost and selling price.
- Or choose "Calculate Revenue" if you know your cost and target margin.
- Enter the required values into the fields.
- Review the gross profit, margin %, and markup % results.
- Copy the report for your records.
When Do You Need a Profit Margin Calculator?
- Pricing a new product or service and need to hit a target margin.
- Reviewing whether your current pricing is actually profitable.
- Comparing markup versus margin when negotiating with suppliers or clients.
Frequently Asked Questions
Margin vs markup?
Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost price. The two numbers will always differ for the same sale — margin is always lower than markup at the same dollar profit.
What is a good profit margin?
It varies widely by industry. Retail often runs 20-50% gross margin, software and services can exceed 70-90%, while grocery and wholesale businesses may operate on margins under 10%. Compare against your specific industry benchmark.
Gross vs net profit margin?
Gross profit margin only subtracts the direct cost of goods sold from revenue. Net profit margin subtracts all expenses — operating costs, taxes, interest — giving a fuller picture of overall profitability.
How to price your services?
Start with your total cost per unit of service, decide on a target margin based on your industry and positioning, then use Mode 2 above to back into the selling price that delivers that margin.