Margin Calculator
Work out gross profit and profit margin from your cost and selling price.
Formula
About this calculator
A margin calculator turns a cost and a selling price into the two numbers every business owner needs: how much profit each sale makes and what percentage of the price that profit represents. Profit margin is one of the clearest measures of how healthy a product, service or whole business is, because it shows how much of every dollar of revenue you actually keep.
The calculation is simple but often confused with markup. Gross profit is your selling price minus your cost. Profit margin expresses that profit as a share of the selling price — so a product costing 70 dollars and sold for 100 has a 30 dollar profit and a 30 percent margin. Markup, by contrast, measures the same profit against the cost, which for this example is nearly 43 percent. The calculator shows both so you never mix them up.
Understanding margin matters because it drives pricing, discounting and break-even decisions. A thin margin leaves little room to absorb a price cut or a rise in costs, while a healthy margin gives you flexibility to run promotions or weather higher expenses. Comparing margins across products also reveals which lines truly carry your business versus which merely add revenue.
Because margin is always measured against the higher selling price, it is mathematically always lower than the equivalent markup — a distinction that trips up many people setting prices. Every figure here is derived directly from the cost and price you enter, making it easy to test different prices and see instantly how your margin responds.
Frequently asked questions
How do you calculate profit margin?
Subtract cost from selling price to get profit, then divide profit by the selling price and multiply by 100. A $30 profit on a $100 sale is a 30% margin.
What is the difference between margin and markup?
Margin measures profit against the selling price; markup measures the same profit against the cost. Markup is always the larger percentage, which is why the two are easy to confuse.
What is a good profit margin?
It varies widely by industry — retail often runs thin while software runs high. Compare against typical margins in your sector rather than a single universal benchmark.
Is this gross or net margin?
This is gross margin, based on the direct cost of a product or service. Net margin also subtracts overheads, taxes and other operating expenses from revenue.
Related calculators
⚠️ This tool calculates gross margin from the cost and price you enter and is for general business planning, not accounting or tax advice.