Profit Margin Calculator
Find your profit margin from cost and price — or the price needed for a target margin.
About this profit margin calculator
Profit margin is the share of the selling price you keep after paying for the product. It's the number lenders, investors and buyers look at, and it's different from markup, which is measured against cost. Mixing the two up is one of the most common pricing errors in small business.
Enter your cost and price to see margin, markup and profit — or enter a target margin and the calculator gives the price to charge.
How to use the Profit Margin Calculator
- Choose whether you know the selling price or a target margin.
- Enter your cost per unit.
- Enter the selling price or target margin.
- Read the margin, markup, profit and price.
Margin formulas
Margin = (Price − Cost) ÷ Price × 100 · Price = Cost ÷ (1 − margin)
This is gross margin — it only subtracts the direct cost of the item. Net margin also subtracts overhead like rent, wages, marketing and taxes.
Worked example
An item that costs $40 and sells for $65 earns $25 gross profit: a 38.46% margin and a 62.5% markup. To earn a 35% margin on a $40 cost, charge 40 ÷ 0.65 = $61.54.
Tips for better results
- Include shipping, packaging and payment fees in cost for a realistic margin.
- A margin can never reach 100%; a markup can be any size.
Frequently asked questions
What is a good profit margin?
It depends heavily on the industry. Grocery stores may run on low single-digit net margins, while software companies can exceed 20%. Compare against your industry's averages.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup). A 50% markup is a 33.3% margin.
Last reviewed: October 2026 · Results are calculated in your browser.