Free Profit Margin Calculator
Enter what something costs you and what you sell it for — get profit margin and markup percentages, and finally learn the difference.
Results
Margin is profit ÷ price (what you keep). Markup is profit ÷ cost (what you added).
How to use the profit margin calculator
- Enter your cost — what one unit costs you to make or buy.
- Enter your selling price.
- Read your profit per unit, margin %, and markup % instantly.
Margin vs markup — the difference that matters
Margin and markup describe the same profit from opposite ends, and mixing them up is one of the most expensive mistakes in small business. Margin is profit divided by selling price: sell for $50 what cost $30 and your margin is 40% — you keep forty cents of every dollar of revenue. Markup is profit divided by cost: the same numbers give a 66.7% markup — you added two-thirds to your cost. Margin can never exceed 100%; markup has no ceiling. The confusion bites when someone says "I want a 50% margin" but prices with a 50% markup — that actually yields only a 33% margin. Investors, lenders, and acquirers all speak margin, so when in doubt, quote margin. Use markup only when working backward from cost to set a price.
Frequently asked questions
What is a good profit margin?
It depends on the industry. Grocery stores thrive on 2–3%, restaurants target 10–15%, and software companies often exceed 70%. Compare against your own industry, not other industries.
Why is markup higher than margin on the same numbers?
Because they divide by different things: markup divides profit by the smaller number (cost), margin by the larger (price). A 100% markup equals a 50% margin.
Can margin be over 100%?
No — margin is profit as a share of price, so it tops out just under 100% (at zero cost). If you see over 100%, you are looking at markup.
Does this include taxes and fees?
No — enter your true all-in cost per unit (materials, labor, fees, shipping) for an honest number. Taxes on profit are a separate calculation.