Margin Calculator
Calculate profit margin and markup
Margin Calculator tool
Margin Results
Cost Price:
$50.00
Selling Price:
$75.00
Profit:
$0.00
Markup:
0.00%
Profit Margin:
0.00%
Margin Calculator: key facts
- What it does
- Calculate profit margin and markup
- Category
- Financial Calculators
- Cost
- Free, with no account, sign-up, or install.
- Your data
- Runs entirely in your browser — the files and text you enter are never uploaded to a server.
- Last reviewed
- . Report an incorrect result.
Understanding the Margin Calculator
Profit margin and markup are easy to confuse, and mixing them up can quietly wreck your pricing. The Margin Calculator takes a cost price and a selling price and reports both numbers clearly: the profit in dollars, the profit margin as a percentage of the sale, and the markup as a percentage of the cost.
It is a daily tool for anyone who sets prices — a shop owner deciding what to charge, a freelancer quoting a project, or a reseller checking that a deal still earns. Seeing margin and markup side by side makes the difference obvious: a 50% markup is only a 33% margin, and this tool spells that out instead of leaving you to guess.
Getting a result
- Enter your cost price — what the item or service costs you.
- Enter your selling price — what the customer pays.
- Read the profit amount, color-coded green for a gain or red for a loss.
- Compare the markup percentage (profit over cost) with the profit margin percentage (profit over selling price), then Copy the figures.
Margin and markup are different numbers
Both figures describe the same profit, but they divide it by different things, and confusing them is one of the more expensive mistakes in small-business pricing. Margin expresses profit as a share of the selling price. Markup expresses the same profit as a share of what the item cost you. Because the selling price is the larger denominator, margin is always the smaller percentage.
The tool reports both from the same two inputs so the gap is visible rather than assumed. A trade supplier quoting you a percentage is usually talking about markup; a finance report is almost always talking about margin. Applying a 40% markup when you needed a 40% margin leaves you meaningfully short on every unit sold.
Cost is allowed to be zero — for a service with no unit cost, say — in which case markup is undefined as a percentage and reported as zero rather than as an error.
- The default entry — cost 50, selling 75 — is 25 of profit: a 33.33% margin and a 50% markup on identical numbers.
- To reach a 40% margin on a 50 cost you must sell at 83.33, which is an 66.67% markup. Applying a 40% markup instead would price it at 70 and yield only a 28.57% margin.
- Doubling cost to selling price — the familiar keystone rule — is a 100% markup and a 50% margin.
Reasons to use it here
- It reports margin and markup as distinct metrics, so you never accidentally treat one as the other when setting prices.
- Profit is color-coded — green when you are making money, red when the selling price is below cost — for an instant read.
- It handles the edge case of a zero selling price gracefully rather than dividing by zero.
- Calculations run in your browser with no account, so confidential cost data stays on your device.
This is gross margin, not profitability
What this calculates is the margin on one unit against its direct cost. It says nothing about whether the business makes money, because rent, wages, software, delivery, payment processing fees, returns, and unsold stock all sit outside the unit cost you entered. A healthy gross margin on a product that sells rarely can still lose money overall.
Two adjustments are worth making before trusting a figure for pricing. Put the fully landed cost in the cost field — including freight, duty, and packaging, not just the invoice price — and remember that any discount you later offer comes straight out of the margin, not out of the cost. A 20% promotional discount on a 33% margin removes roughly two-thirds of the profit on every unit sold.
Frequently Asked Questions
What is the difference between margin and markup?
Markup is profit as a percentage of your cost, while margin is profit as a percentage of the selling price. A product that costs $10 and sells for $15 has a 50% markup but a 33.3% margin. They describe the same profit from two different angles.
How do I set a price for a target margin?
To hit a desired margin, divide your cost by (1 minus the margin as a decimal). For a 40% margin on a $12 cost, that is 12 ÷ 0.6 = $20. Enter cost and candidate prices here to check the margin each one produces.
Why is my profit showing in red?
A red profit means your selling price is below your cost — you would lose money on the sale. Raise the selling price above the cost price to move into profit, which the calculator shows in green.
