Profit Margin Calculator
Enter any two of cost, price, margin, markup, or profit to solve the rest — with a margin-to-markup table, net margin after fees and tax, and the price that hits a target margin.
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Profit Margin Calculator
Type in any two boxes and the other three are worked out. The two you typed in most recently are the ones used.
Enter two values — say a cost and a selling price — to see profit, margin, and markup.
Net margin after fees and tax (optional)
Shipping, packaging, per-order fees.
Card processing, marketplace commission.
VAT or GST inside the price. 0 if prices are pre-tax.
Price for a target margin
Margin ⇄ markup
| Margin | Markup | Price = cost × |
|---|---|---|
| 10% | 11.1% | 1.111 |
| 15% | 17.6% | 1.176 |
| 20% | 25% | 1.25 |
| 25% | 33.3% | 1.333 |
| 30% | 42.9% | 1.429 |
| 33.3% | 50% | 1.5 |
| 40% | 66.7% | 1.667 |
| 50% | 100% | 2 |
| 60% | 150% | 2.5 |
| 70% | 233.3% | 3.333 |
| 75% | 300% | 4 |
| 80% | 400% | 5 |
Markup = margin ÷ (1 − margin); margin = markup ÷ (1 + markup).
About Profit Margin Calculator
Type any two of the five numbers that describe a sale — cost, selling price, margin, markup, or profit — and the calculator fills in the other three. A $60 item sold for $100 is a $40 profit, a 40% margin, and a 66.67% markup. Start from the other end and it works just as well: a $60 cost at a 40% margin needs a $100 price, and a $25 profit at a 25% markup means the item cost $100.
The boxes you typed in are the inputs and the rest are calculated, shaded so you can tell them apart. Typing into a calculated box makes it an input instead, and the older of your two inputs becomes calculated — so you can enter a cost and price, then try a different margin, without clearing anything.
Margin vs markup
Both describe profit as a percentage, but of different things. Margin is profit divided by the selling price; markup is profit divided by the cost. The same sale always has a bigger markup than margin, and confusing the two is the classic pricing mistake: adding a 30% markup to a $70 cost gives $91, which is only a 23% margin, not 30%.
To convert, markup = margin ÷ (1 − margin) and margin = markup ÷ (1 + markup). The table under the calculator lists common pairs — a 50% margin is a 100% markup (double the cost), and a 25% markup is a 20% margin — and, once you've entered a cost, the price each margin needs.
Gross vs net margin
The first result is the gross margin on the item alone. The optional fees-and-tax section turns it into a net margin by taking out what a real sale costs:
- Other costs per sale — shipping, packaging, or a flat per-order fee.
- Fees as a percent of the price — card processing (around 3%) or a marketplace commission. They're charged on the full price the customer pays.
- Tax included in the price — for VAT or GST-inclusive prices. The tax is taken out first, because it was never yours, and margins are measured against what's left.
- Income tax on profit — for a rough after-tax figure.
Pricing for a target margin
Enter a target margin and the calculator works backwards to the price that delivers it after every fee and cost above. Fees charged as a percentage of the price push it up more than you might expect: with a $60 cost and 3% card fees, a 40% margin needs $105.26, not $100.
Example
Input
Cost $60 · Selling price $100 Fees 3% · Other costs $5
Output
Profit $40.00 · Margin 40% · Markup 66.67% Net profit $32.00 · Net margin 32%
The fees take $3 of the $100 and the other costs $5, so $32 of each sale is left — 32% of the price.
Limitations
- It's per sale. Fixed overheads like rent, salaries, and software aren't spread over your sales, so the net margin here is a contribution margin, not your business's bottom-line net margin.
- Income tax is a flat percentage of the profit from this one sale; real income tax is calculated on the year's total profit, with brackets and deductions.
- Fees are a single percentage of the price. Platforms that combine a percentage with a fixed fee can be modelled with both fields, but tiered or capped fees need the platform's own calculator.
Frequently asked questions
How do I calculate profit margin?
Subtract the cost from the selling price to get the profit, then divide the profit by the selling price and multiply by 100. An item that costs $60 and sells for $100 makes $40 profit, and $40 ÷ $100 = 40% margin. Margin is always measured against the price, so it can never reach 100% unless the item cost nothing.
What's the difference between margin and markup?
Margin is profit as a share of the selling price; markup is profit as a share of the cost. On a $60 item sold for $100, the $40 profit is a 40% margin ($40 ÷ $100) but a 66.67% markup ($40 ÷ $60). Retailers usually quote markup, while accountants and investors use margin, so check which one someone means.
How do I convert markup to margin?
Divide the markup by 1 plus the markup: margin = markup ÷ (1 + markup). A 50% markup is 0.5 ÷ 1.5 = 33.3% margin, and a 100% markup is a 50% margin. To go the other way, markup = margin ÷ (1 − margin), so a 40% margin needs a 66.7% markup.
How do I price a product for a 40% margin?
Divide the cost by 1 minus the margin: $60 ÷ (1 − 0.40) = $100. Don't multiply the cost by 1.4 — that's a 40% markup, which gives $84 and only a 28.6% margin. If the platform takes a percentage of the price as fees, subtract that too: $60 ÷ (1 − 0.40 − 0.03) = $105.26 for a 40% margin after 3% fees.
What is a good profit margin?
It depends on the industry. Grocery stores often run net margins of 1–3%, restaurants 3–10%, general retail around 2–5% net (with gross margins of 25–50%), and software or digital products can exceed 70% gross. Compare yourself with businesses like yours rather than a universal number, and look at net margin after fees and overheads, not just the gross margin on each item.
What's the difference between gross margin and net margin?
Gross margin only subtracts the cost of the item itself. Net margin also subtracts everything else the sale costs — payment fees, shipping, platform commission, and, for the business as a whole, overheads and taxes. A product with a healthy 50% gross margin can end up near zero once fees, shipping, and returns are counted.
Should VAT or sales tax be included in the margin calculation?
No. Sales tax and VAT are collected for the government, so margins are calculated on the price without them. If your prices include VAT, enter the rate in the tax-included field and the calculator removes it first: a £120 price with 20% VAT is £100 of revenue, and that's what the margin is measured against.