Calculate your profit margin and markup instantly — two critical metrics every business owner needs to understand for pricing strategy.
Margin = (Selling Price − Cost) / Selling Price × 100%. Markup = (Selling Price − Cost) / Cost × 100%.
Confusing margin and markup is a common mistake that leads to underpricing products and losing money.
This calculator earns its keep at decision points: before accepting a loan, comparing investment platforms, or negotiating salary. The difference between the headline figure and the true cost or return is only visible with accurate arithmetic.
The most consequential mistake is comparing financial figures that are not on the same basis — gross versus net, before-tax versus after-tax, or nominal versus inflation-adjusted. Always check whether figures you are comparing use the same definition.
A small business owner compares two financing options for new equipment: a 5-year bank loan at 5.2% versus a leasing arrangement with a monthly fee. The calculator translates both into a total cost figure, making the comparison straightforward.
Profit Margin & Markup Formulas
Gross Margin % = ((Revenue − COGS) ÷ Revenue) × 100
Markup % = ((Revenue − COGS) ÷ COGS) × 100
COGS = Cost of Goods Sold. To find price from desired margin: Price = Cost ÷ (1 − Margin%/100)
You manufacture a product for $40 and sell it for $70.
Result: Gross margin = 42.9%, Markup = 75%
Margin is based on selling price (what you keep). Markup is based on cost (what you add). A $50 cost with
Retail: 10–35%. Software: 70–90%. Restaurants: 3–9%. It varies heavily by industry.
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