Margin Calculator

Calculate your profit margin and markup instantly — two critical metrics every business owner needs to understand for pricing strategy.

What this calculator does

Margin = (Selling Price − Cost) / Selling Price × 100%. Markup = (Selling Price − Cost) / Cost × 100%.

How it works

Confusing margin and markup is a common mistake that leads to underpricing products and losing money.

When to use this calculator

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.

Common mistakes

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.

Real-world scenarios

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.

Formula

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)

Worked example

You manufacture a product for $40 and sell it for $70.

  1. Profit = $70 − $40 = $30
  2. Margin = ($30 ÷ $70) × 100 = 42.9%
  3. Markup = ($30 ÷ $40) × 100 = 75%

Result: Gross margin = 42.9%, Markup = 75%

Frequently asked questions

What is the difference between margin and markup?

Margin is based on selling price (what you keep). Markup is based on cost (what you add). A $50 cost with

00 price = 50% markup but 50% margin.

What is a good profit margin?

Retail: 10–35%. Software: 70–90%. Restaurants: 3–9%. It varies heavily by industry.