Profit Margin Calculator

What This Profit Margin Calculator Does

If you buy something for one price and sell it for more, the difference is your profit. But the same profit can look big or small depending on what you compare it to:

• Margin measures profit as a percent of the selling price - the slice of each sale you keep.
• Markup measures the same profit as a percent of the cost - how much you added on top of what you paid.

A 4 profit on a 10 sale is a 40% margin but a 67% markup, from the exact same numbers. This tool shows both so you do not mix them up.

Margin and Markup Formulas

$$\begin{aligned} \text{profit} &= \text{selling price} - \text{cost} \\ \text{margin} &= \frac{\text{profit}}{\text{selling price}} \times 100 \\ \text{markup} &= \frac{\text{profit}}{\text{cost}} \times 100 \end{aligned}$$

How to Use It

1. Enter the cost of the item.
2. Enter the selling price (revenue).
3. Read the profit, margin, and markup.

Worked Examples

Cost	Selling price	Profit	Margin	Markup
100	140	40	28.57%	40%
50	75	25	33.33%	50%
80	100	20	20%	25%
200	250	50	20%	25%

Common Uses

• Pricing a product and checking the margin.
• Comparing margin against markup.
• Working out profit on a sale.

FAQ

What is the difference between margin and markup?

Margin is profit as a percent of the selling price; markup is profit as a percent of the cost. For a cost of 100 sold at 140, the margin is 28.57% but the markup is 40%.

How do you calculate profit margin?

Subtract the cost from the selling price to get the profit, then divide by the selling price: $\frac{140 - 100}{140} = 28.57\%$.

Can profit margin be negative?

Yes. If the selling price is below the cost, the profit and the margin are negative, which means a loss.

What is a good profit margin?

It depends on the industry. Compare against typical margins for your specific type of business rather than a single benchmark.