About the profit margin calculator
Margin and markup both describe profit, but against different bases. Margin compares profit with the selling price; markup compares it with the cost. Pricing decisions are clearer when you know both.
How to use this calculator
- Enter the cost.
- Enter the selling price.
- Read profit, margin, and markup.
Worked examples
- Profit = $25
- Margin = 25 ÷ 65 ≈ 38.46%
- Markup = 25 ÷ 40 = 62.5%
38.46% margin, 62.5% markup.
Measurement guidance
Pricing from a target margin
To hit a target margin, price = cost ÷ (1 − margin). For a 40% margin on a $30 cost: 30 ÷ 0.6 = $50.
Frequently asked questions
Why is markup higher than margin?
Markup divides the same profit by the smaller cost figure.
Is this business advice?
No. It’s a general calculation.