Profit Margin Calculator
Margin is the number that decides whether a busy business is also a profitable one. This calculator takes your cost and your selling price and returns gross profit per unit, gross margin percentage and the equivalent markup — the three figures people mix up most often. It also runs in reverse: give it a cost and the margin you need to hit, and it tells you what to charge. Enter monthly units and it scales everything to total profit, so you can see whether a thin margin on high volume actually beats a fat margin on a handful of sales. Every calculation happens in your browser, so your cost data stays private.
Direct cost only — materials, goods, delivery.
Add volume to see total profit rather than per-unit.
Gross profit margin
40.00%
$40.00 profit on each unit sold.
- Profit per unit
- $40.00
- Selling price
- $100.00
- Equivalent markup
- 66.67%
Markup divides profit by cost, so it always reads higher than margin.
This is gross margin — it excludes rent, salaries, marketing and tax. A healthy gross margin can still leave a net loss if overheads are high.
How to use Profit Margin Calculator
- 1
Enter your cost
Type what one unit costs you — the cost of goods, materials or the wholesale price you pay.
- 2
Add your price or target margin
Enter your selling price to see the resulting margin, or switch to target mode and enter the margin you need to work out the price.
- 3
Review margin, markup and total
Read gross profit, margin percentage and markup. Add monthly units to see what it means in total profit.
Why use this tool
- Gross margin, profit per unit and markup from one pair of numbers
- Reverse mode: enter a target margin to get the price you must charge
- Scales to total profit when you enter monthly volume
- Shows margin and markup side by side so you stop confusing the two
- Private by design — cost and pricing data never leave your device
Frequently asked questions
- How do I calculate profit margin?
- Subtract cost from price to get gross profit, divide that by the price, and multiply by 100. A product costing $60 sold at $100 gives (100 − 60) ÷ 100 × 100 = 40% margin. Note the denominator is the price, not the cost — dividing by cost gives markup instead.
- What is the difference between margin and markup?
- Both compare the same profit to a different base. Margin divides profit by the selling price; markup divides it by the cost. On a $60 item sold for $100, margin is 40% but markup is 67%. Quoting a markup figure as if it were margin is one of the most common pricing errors, and it always overstates how profitable you are.
- What is a good profit margin?
- It depends entirely on the industry. Grocery and hardware retail often run on 5-10% net margin, restaurants on 3-9%, professional services on 15-25%, and software can exceed 70%. Compare against benchmarks for your own sector rather than a general figure, and track the trend in your own numbers over time.
- What is the difference between gross and net profit margin?
- Gross margin counts only the direct cost of what you sell. Net margin subtracts everything else too — rent, salaries, marketing, interest and tax — so it shows what actually reaches the bottom line. This calculator works out gross margin; a healthy gross margin can still produce a net loss if overheads are too high.
- How do I price a product to hit a target margin?
- Divide your cost by (1 − target margin as a decimal). For a $60 cost at a 40% target margin: 60 ÷ (1 − 0.40) = $100. Don't just add 40% to the cost — that yields $84 and only a 28.6% margin. The reverse mode in this calculator handles it for you.
- Should I include labour in the cost?
- For gross margin, include the costs directly tied to producing or delivering the unit — materials, packaging, shipping, and the labour hours spent on that specific job. Leave out general overheads like rent and admin salaries; those belong in the net margin calculation.
- Can margin be more than 100%?
- No. Margin is profit as a share of the price, so it approaches 100% as cost approaches zero but never exceeds it. Markup has no such ceiling — a $1 cost sold at $10 is a 900% markup and a 90% margin.
Free markup calculator. Turn cost into a selling price at any markup percentage, and see the margin that markup actually produces. No sign-up needed.
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