Business
Profit Margin Calculator
By the Dailycaltor team · formula-verified · last updated July 2026
Cost in, revenue in — margin out.
Details
Formula
Margin = (revenue − cost) ÷ revenue × 100. Markup = (revenue − cost) ÷ cost × 100. Margin is profit as a share of the selling price; markup is profit as a share of cost — mixing them up misprices products.
Worked examples
- Cost $60, sell $100 → $40 profit, 40% margin, 66.7% markup.
- Cost $50, sell $75 → 33.3% margin, 50% markup.
- To get a 50% margin on a $60 cost, you must sell at $120 (not $90).
Common mistakes
- Confusing margin with markup — a 50% markup is only a 33% margin.
- Forgetting hidden costs (fees, shipping, payment processing) in the cost figure.
- Setting price from cost alone and ignoring what the market will pay.
Last updated: July 2026. Educational estimates only.
Questions
What is a good profit margin?
It varies by industry: retail often runs 20–50% gross margin; services can be higher. Compare within your niche.
Margin vs markup — the difference?
Margin divides profit by revenue; markup divides profit by cost. Same profit, different percentages.
How do I price for a target margin?
Price = cost ÷ (1 − target margin). For 40% margin on $60 cost: 60 ÷ 0.6 = $100.
Is this gross or net margin?
Gross — it uses direct cost. Net margin also subtracts overheads, tax and other expenses.
Can margin be negative?
Yes — selling below cost gives negative margin, meaning a loss on each sale.
Does this work in any currency?
Yes, the percentages are currency-independent.