Profit Margin Calculator
Calculate gross profit, net profit margin, markup percentage, and revenue needed for a target margin.
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How to use this calculator
Profit Margin % expresses profit as a percentage of revenue. Markup % expresses profit as a percentage of cost.
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Enter the revenue (total selling price or income).
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Enter the cost (cost of goods sold or total expenses).
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The calculator shows your profit margin %, gross profit, and markup %.
Frequently asked questions
What is profit margin?
Profit margin is profit expressed as a percentage of revenue. A 40% margin means 40 cents of every dollar of revenue is profit. It is the most commonly used metric for comparing profitability across products or companies.
What is the difference between margin and markup?
Margin = Profit ÷ Revenue. Markup = Profit ÷ Cost. If you buy a product for $60 and sell for $100, margin = 40% and markup = 66.7%. Margin and markup describe the same profit in different directions.
What is a good profit margin?
It varies by industry. Grocery retail: 1–3%. Software/SaaS: 60–80%. Restaurants: 3–9%. Manufacturing: 5–10%. Consulting: 20–40%. Compare margins within the same industry, not across industries.
How do I set a price to hit a target margin?
Use the formula: Price = Cost ÷ (1 − Target Margin). To achieve a 40% margin on a product costing $60: Price = 60 ÷ 0.60 = $100.
Profit margin and markup explained
How to use the profit margin
Use this profit margin to gross profit, net profit margin, markup percentage, and revenue needed for a target margin. Enter your values above and get your result in seconds. The tool is free, works on all devices, and keeps your data private — nothing is stored or shared.
How the profit margin works
The profit margin calculator uses standard formulas used in financial planning, budgeting, and investment decisions. Enter your inputs, and the tool calculates the result instantly in your browser. No server-side processing means your data stays on your device. Results update in real time as you change inputs.
Margin vs markup: the common confusion
Margin and markup describe the same dollar profit from two different angles. A product costing $50 and selling for $100 has a profit of $50. Margin: $50 ÷ $100 = 50%. Markup: $50 ÷ $50 = 100%. A 50% margin is not the same as a 50% markup.
Types of profit margin
Gross margin = (Revenue − COGS) ÷ Revenue. Operating margin = Operating Income ÷ Revenue (deducts operating expenses). Net margin = Net Income ÷ Revenue (deducts all expenses including tax and interest). This calculator computes gross margin — the most fundamental measure.
Using margin to set prices
Price = Cost ÷ (1 − Target Margin %). To price at 30% margin: Price = Cost ÷ 0.70. To price at 50% margin: Price = Cost ÷ 0.50. Pricing for markup is different: Price = Cost × (1 + Markup %). A 50% markup on a $60 item = $90 price, which is a 33% margin.
Profit margin: how it works
This free tool helps you plan and compare financial scenarios in seconds. Enter your figures, adjust the assumptions, and instantly see how different inputs affect the outcome — ideal for budgeting, benchmarking, and data-driven decision-making.
Who uses this tool?
Financial planners, accountants, students, and individuals use it to model scenarios before committing to major financial decisions. It is equally useful for quick sanity checks and detailed what-if analyses.
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