Profit Margin Calculator
Turn your cost and selling price into a profit margin percentage and a markup percentage. Understand both: margin is profit as a share of the selling price, markup is profit as a share of the cost.
What this means
Margin and markup both measure profit but against different bases. If you buy for $80 and sell for $100: margin is 20% (profit over price), markup is 25% (profit over cost).
How we calculate it
Formula
Margin % = (Revenue − Cost) ÷ Revenue × 100. Markup % = (Revenue − Cost) ÷ Cost × 100.Worked example
Cost $80, sell for $100:
- 1Profit = 100 − 80 = 20
- 2Margin = 20 ÷ 100 × 100 = 20%
- 3Markup = 20 ÷ 80 × 100 = 25%
Important assumptions
- Margin cannot exceed 100% unless you add other revenue streams.
Frequently asked questions
Margin vs markup — which to use?
Use markup when setting prices from cost, and margin when analyzing financial statements. A 50% markup equals a 33% margin.
What is a good profit margin?
Averages vary widely — retail often runs 5–20%, software 60–90%. Compare with your industry.
Guide
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