Profit Margin Calculator
Example: Cost $60, Price $100 = 40% profit margin
Calculate gross profit margin, markup percentage, and net profit. The results can be used when setting prices, evaluating products, or reviewing business performance.
Revenue − cost = profit (per unit)
Profit Margin
Gross Profit (per unit)
Markup
Selling Price
Cost
Total Profit
How We Calculate This
Gross Profit = Price - Cost. Margin = (Profit / Price) x 100. Markup = (Profit / Cost) x 100. Scenarios show different margin targets applied to your cost.
Methodology last reviewed: June 2025. How SparkCalc works
Sources: U.S. Census Bureau: Quarterly Financial Report (QFR) · U.S. SBA: Break-even point · U.S. SBA: Calculate your startup costs
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. A 50% markup equals a 33% margin. Margin is always lower than markup for the same profit.
What is a good profit margin?
It varies by industry. Retail: 3-5%. Software: 70-90%. Restaurants: 3-9%. Manufacturing: 8-12%. Compare against industry benchmarks for your specific business type.
How do I calculate selling price from desired margin?
Price = Cost / (1 - Margin). For a 40% margin on a $60 cost: $60 / (1 - 0.40) = $60 / 0.60 = $100 selling price.
Why is my margin different from my markup?
They use different bases. Margin uses selling price as the base, markup uses cost. A $40 profit on $100 sale is 40% margin but 67% markup ($40/$60 cost).
Related Calculators
You might also find these calculators helpful: Margin Calculator, Break-Even Calculator, and Discount Calculator.
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