Margin Calculator
Calculate profit margin, markup, gross profit, and target selling price from cost and price inputs.
Margin Calculator
This margin calculator is for educational business estimates only. It does not include taxes, fees, refunds, inventory shrinkage, accounting rules, or financial advice.
How it works
Formula and steps
The formula shows how the margin calculator turns your inputs into the result. Use it to check the calculation, then follow the example steps to see each part of the math.
Formula & steps
Find margin formula
G = P - C; M = (G / P) x 100; U = (G / C) x 100
Use these formulas when you know selling price and cost. This matches the Find margin calculator mode.
G= Gross profitP= Selling price or revenueC= CostM= Profit margin percentageU= Markup percentageTarget price from margin formula
P = C / (1 - M / 100)
Use this formula when you know cost and the target profit margin. This matches the Price from margin calculator mode.
P= Required selling priceC= CostM= Target profit margin percentageTarget price from markup formula
P = C x (1 + U / 100)
Use this formula when you know cost and the markup percentage. This matches the Price from markup calculator mode.
P= Required selling priceC= CostU= Markup percentage- 1Subtract cost from selling price to find gross profit.
- 2Divide gross profit by selling price and multiply by 100 to find profit margin.
- 3Divide gross profit by cost and multiply by 100 to find markup.
- 4To set a target margin, divide cost by 1 minus the target margin as a decimal.
Worked examples
A $100 selling price with $60 cost gives $40 gross profit, 40% margin, and 66.67% markup.
A $60 cost with a 40% target margin needs a $100 selling price.
A $60 cost with 50% markup gives a $90 selling price and a 33.33% margin.
Common uses
- Profit margin calculator
- Markup calculator
- Gross margin calculator
- Product pricing
- Retail pricing
- Cost-plus pricing
Common mistakes
- Confusing margin with markup. Margin divides profit by selling price, while markup divides profit by cost.
- Using revenue after tax, fees, or discounts with a cost number that was not adjusted the same way.
- Setting a 100% target margin, which would require division by zero.
Margin guide
Types of margin and markup calculations
A margin calculator can answer different pricing questions depending on what you already know. Use price and cost to calculate profit margin, use cost and target margin to set a selling price, or use cost and markup to check cost-plus pricing.
Find margin from price and cost
Use Find margin when you know the selling price and item cost. The calculator subtracts cost from price to find gross profit, then divides gross profit by selling price to calculate profit margin. It also shows markup by dividing gross profit by cost.
Find price from target margin
Use Price from margin when your goal is a specific gross margin percentage. This is common for retail pricing, product pricing, and business margin planning because it solves for the price needed after covering cost.
Find price from markup
Use Price from markup when you add a percentage on top of cost. A markup calculator is useful for cost-plus pricing, but markup is not the same as margin: a 50% markup on $60 gives a $90 price and a 33.33% margin.
Profit margin vs markup
Profit margin compares gross profit to selling price. Markup compares gross profit to cost. Because the denominator is different, markup is usually higher than margin for the same sale. For example, $40 profit on a $100 price is a 40% margin, but $40 profit on $60 cost is a 66.67% markup.
Gross margin calculator limits
This gross margin calculator focuses on selling price, cost, gross profit, margin, and markup. It does not include sales tax, payment fees, shipping, returns, labor, overhead, or net profit margin unless you include those costs in the cost field yourself.
FAQ
Profit margin is gross profit divided by selling price, multiplied by 100. Gross profit is selling price minus cost.
Markup is gross profit divided by cost, multiplied by 100. It compares profit to what the item costs.
No. Margin divides profit by selling price. Markup divides profit by cost, so the markup percentage is usually higher than the margin percentage for the same price and cost.
Divide cost by 1 minus the target margin as a decimal. For example, with $60 cost and 40% margin, price is 60 / (1 - 0.40), or $100.
A gross profit margin calculator finds gross profit and margin from selling price and cost before other expenses such as taxes, operating costs, refunds, or fees.
More Financial calculators
Browse other categories