This profit margin calculator works out gross margin, markup and profit from your cost and selling price. Enter a target margin to see the price you need to charge.
Margin and markup formulas
Gross margin = (price − cost) ÷ price × 100
Markup = (price − cost) ÷ cost × 100
Price for a target margin = cost ÷ (1 − target margin)
Worked example
A product costs $60 and sells for $100. Profit is $40, gross margin is 40% and markup is 66.67%. To earn a 50% margin, the price would need to be $120.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price; markup is profit as a share of cost. The same sale always has a higher markup than margin, which is why mixing them up leads to underpricing.
Can margin be more than 100%?
No. Margin can approach 100% but never exceed it, because profit can never be larger than the price. Markup has no upper limit.