Margin Calculator
Calculate your profit margin, markup, and gross profit instantly. Enter your cost and revenue to see how much profit you're making on each sale. Perfect for business owners, sales professionals, and anyone looking to price products effectively.
What Is Profit Margin?
Profit margin is the percentage of revenue that remains as profit after deducting the cost of goods sold (COGS). It measures how much profit a company makes for every dollar of revenue. A higher margin indicates better profitability and efficient cost management.
This calculator also computes markup, which is the percentage increase over cost to determine the selling price. While margin is calculated as a percentage of revenue, markup is calculated as a percentage of cost.
How Does the Margin Calculator Work?
The calculator uses the following standard formulas:
Gross Profit = Revenue − Cost
Profit Margin = (Gross Profit ÷ Revenue) × 100
Markup = (Gross Profit ÷ Cost) × 100
For example: Cost = $80, Revenue = $100
Gross Profit = $100 − $80 = $20
Profit Margin = ($20 ÷ $100) × 100 = 20%
Markup = ($20 ÷ $80) × 100 = 25%
You can also use the "Price from Cost & Margin" mode to calculate the selling price needed to achieve a target profit margin.
Why Use This Margin Calculator?
- Two Modes: Calculate margin from cost and revenue, or find the price needed for a target margin.
- Multiple Currencies: Supports USD, EUR, GBP, and more.
- Visual Breakdown: A chart shows the relationship between cost, revenue, and profit.
- Bulk Calculations: Enter the number of units to see total cost, revenue, and profit.
- Free & Private: No registration, no data storage.
Margin vs Markup
- Margin: Profit expressed as a percentage of the selling price. (Profit ÷ Revenue)
- Markup: Profit expressed as a percentage of the cost. (Profit ÷ Cost)
- Key Difference: Margin is always lower than markup for the same profit. A 20% margin equals a 25% markup.
❓ Margin Calculator FAQ
What is profit margin?
Profit margin is the percentage of revenue that remains as profit after deducting the cost of goods sold. It measures how much profit you make for every dollar of revenue.
What is the formula for profit margin?
Profit Margin = (Revenue − Cost) ÷ Revenue × 100. For example, if you sell a product for $100 and it costs you $80, your profit margin is 20%.
What is the difference between margin and markup?
Margin is profit divided by revenue (selling price). Markup is profit divided by cost. For example, a product that costs $80 and sells for $100 has a 20% margin and a 25% markup.
What is a good profit margin?
Good profit margins vary by industry. Retail typically has 2-10% margins, while software companies can have 20-30% or more. A good margin depends on your industry, business model, and competition.
How do I calculate selling price from cost and margin?
Selling Price = Cost ÷ (1 − Margin%). For example, if your cost is $80 and you want a 20% margin, the selling price is $80 ÷ (1 − 0.20) = $100.
What is the difference between gross profit and net profit?
Gross profit is revenue minus the cost of goods sold (COGS). Net profit is revenue minus all expenses, including operating expenses, taxes, and interest. Gross profit shows product profitability; net profit shows overall business profitability.
How do I calculate markup from margin?
Markup = Margin ÷ (1 − Margin). For example, a 20% margin equals a 25% markup: 0.20 ÷ (1 − 0.20) = 0.25.
How do I calculate margin from markup?
Margin = Markup ÷ (1 + Markup). For example, a 25% markup equals a 20% margin: 0.25 ÷ (1 + 0.25) = 0.20.
What is COGS (Cost of Goods Sold)?
COGS is the direct cost of producing goods sold by a company. This includes the cost of materials and labor directly used to create the product. It does not include indirect expenses like marketing or administrative costs.
How does the calculator handle multiple units?
In advanced options, you can enter the number of units. The calculator will multiply the per-unit cost and revenue by the number of units to show total cost, total revenue, and total profit.
What is the difference between margin and profit?
Profit is the absolute dollar amount you earn (Revenue − Cost). Margin is the percentage of revenue that becomes profit. A $20 profit on $100 revenue is a 20% margin.
How do I increase my profit margin?
You can increase your profit margin by raising prices (if demand allows), reducing costs (COGS or operating expenses), improving operational efficiency, or increasing sales volume.
What is the difference between gross margin and net margin?
Gross margin measures profitability after COGS. Net margin measures profitability after all expenses. Net margin is a more comprehensive measure of overall business profitability.
How accurate is this margin calculator?
This calculator provides accurate results based on standard financial formulas. However, actual business performance may vary due to factors like overhead costs, taxes, and other expenses not included in this calculation.
What is the break-even point?
The break-even point is the number of units you need to sell to cover all your costs — both fixed and variable. At break-even, you make zero profit but also zero loss. This is different from margin, which measures per-unit profitability.
Can I use this calculator for services?
Yes. For services, "cost" would be the cost of delivering the service (labor, materials, etc.), and "revenue" would be the price you charge for the service.
What is the difference between contribution margin and profit margin?
Contribution margin is revenue minus variable costs, used to cover fixed costs. Profit margin is revenue minus all costs (fixed and variable). This calculator focuses on profit margin using COGS as the cost.
How do I use this calculator for pricing my products?
Use the "Price from Cost & Margin" mode. Enter your cost and your desired profit margin, and the calculator will show you the selling price you need to charge to achieve that margin.
What is the difference between markup and margin in retail?
In retail, markup is commonly used to set prices (e.g., "keystone markup" of 50% means doubling the cost). Margin is used to measure profitability after sales. Both are important for different purposes.