Profit Margin Calculator
Calculate gross profit margin from revenue and cost, or find the selling price needed to achieve a target margin. Includes both margin and markup calculations.
Calculate Profit Margin
Result
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Gross Profit
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Margin %
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Markup %
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Selling Price
Formulas
Gross Profit = Revenue − Cost
Margin % = (Revenue − Cost) ÷ Revenue × 100
Markup % = (Revenue − Cost) ÷ Cost × 100
Selling Price (from margin) = Cost ÷ (1 − Margin ÷ 100)
Margin % = (Revenue − Cost) ÷ Revenue × 100
Markup % = (Revenue − Cost) ÷ Cost × 100
Selling Price (from margin) = Cost ÷ (1 − Margin ÷ 100)
Frequently Asked Questions
What is gross profit margin?
Gross margin = (Revenue − COGS) ÷ Revenue × 100. For revenue $150 and cost $90: profit = $60, margin = 60 ÷ 150 × 100 = 40%. Gross margin doesn't include operating expenses (rent, salaries, marketing) — those come after to calculate net margin.
What is the difference between margin and markup?
Margin: profit ÷ selling price. Markup: profit ÷ cost. Same $40 profit on an $80 cost/$120 sell: margin = 40 ÷ 120 = 33.3%; markup = 40 ÷ 80 = 50%. Markup is always higher than margin for the same transaction. Confusing them leads to pricing errors — always clarify which metric you're using.
What is a good profit margin?
Varies significantly: supermarkets average 2–4% net margin. Software companies 15–30%+ net. Restaurants 3–9%. Manufacturing 5–20%. Focus on your industry benchmark — a 5% margin is excellent in grocery retail but poor in consulting. Gross margin is more comparable across companies; net margin depends on business model and cost structure.