Profit Margin Calculator

Profit margin is the percent of revenue that is profit after costs. Use this calculator to compute margin vs markup and find the selling price for a target margin.

Runs in your browser · No data stored · No signup

A profit margin calculator computes profit, gross margin, and markup from revenue and cost, and can reverse-calculate a selling price for a target margin.

These calculations use gross margin (revenue minus cost of goods). Net margin requires deducting all operating expenses, taxes, and overhead. Consult an accountant for pricing and financial reporting decisions.

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By Muhammad Abdullah Rauf · Founder, EverydayTools.proUpdated 2026-05-03· Reviewed by EverydayTools Editorial Team

What is a profit margin calculator?

Free profit margin calculator — compute profit, margin %, and markup from cost and selling price, or find price for a target margin. Runs locally. No signup. Runs locally in your browser when supported—no upload required for normal use. Designed for quick everyday tasks with clear, copy-friendly output.

Key takeaways: margin uses price as the denominator; markup uses cost; target price for a margin is cost ÷ (1 − margin).

Quick answers

Concise answers for common searches — definitions, steps, and comparisons.

What does Profit Margin Calculator do?

Profit margin is the percent of revenue that is profit after costs. Use this calculator to compute margin vs markup and find the selling price for a target margin.

Is Profit Margin Calculator private?

Profit Margin Calculator (/profit-margin-calculator) runs in your browser when supported—inputs are not uploaded to EverydayTools servers.

Margin and markup formulas

The calculator computes profit, margin, and markup from revenue and cost, and supports reverse pricing for a target margin.

Formula

Profit = price − cost; Margin% = (profit ÷ price) × 100; Markup% = (profit ÷ cost) × 100; Target price = cost ÷ (1 − margin). Where price = selling price (revenue) and cost = unit cost (COGS).

Assumptions

  • Revenue and cost refer to gross figures for the same unit or period

Limitations

  • Net margin requires full expenses and taxes
  • Results are only as accurate as your cost inputs

How to use Profit Margin Calculator

  1. Enter the revenue (selling price)

    Type the total revenue or unit selling price. For a single product: the price you sell it for. For a business: total revenue for the period.

  2. Enter the cost (cost of goods sold)

    Type the cost of making or buying the item, or the total cost of goods sold (COGS) for the period. Do not include operating overhead unless you want a full net margin calculation.

  3. Read the profit metrics

    The calculator shows: gross profit (revenue − cost), gross margin % ((profit ÷ revenue) × 100), and markup % ((profit ÷ cost) × 100).

  4. Use reverse mode to find required price

    Enable 'find selling price' mode: enter cost and target margin %, and the tool calculates the minimum selling price to achieve that margin.

Profit Margin Calculator examples

Calculate margin on a product

Input

Revenue: $50 · Cost: $30

Output

Gross profit: $20 · Gross margin: 40% · Markup: 66.7%

$50 revenue − $30 cost = $20 profit. Margin: 20/50 = 40%. Markup: 20/30 = 66.7%. A 40% margin means 40 cents of every dollar of revenue is profit.

Find selling price for 50% margin

Input

Cost: $25 · Target margin: 50%

Output

Required selling price: $50

If margin = (price − cost) ÷ price = 0.50, then price = cost ÷ (1 − margin) = $25 ÷ 0.50 = $50.

Real e-commerce pricing example (fees + margin)

Input

Selling price: $40 · Product cost: $18 · Platform fee: 15% ($6) · Shipping: $4

Output

Profit: $12 · Margin on selling price: 30%

Treat fees and shipping as costs: total cost = 18 + 6 + 4 = 28. Profit = 40 − 28 = 12. Margin = 12 ÷ 40 = 30%. This is why marketplace fees can shrink margin even when markup looks high.

Who uses Profit Margin Calculator?

Common real-world scenarios where this tool saves time.

E-commerce sellers

Set product prices to hit margin targets

Enter your supplier cost and target gross margin to find the minimum selling price. Factor in marketplace fees (Amazon 15%, eBay 13%) as additional cost to ensure final margins are met.

Freelancers and consultants

Calculate service pricing for target profitability

Enter your cost of delivery (time × hourly cost, tools, sub-contractors) and desired margin to set client-facing prices that ensure the business remains profitable.

Finance and accounting teams

Benchmark gross margin against industry standards

Software companies target 70–80% gross margins; retail targets 20–40%; restaurants 60–70% gross but only 3–9% net. Calculate and compare actual margins to industry benchmarks.

Reference tables

Margin vs Markup: Key Differences

Margin and markup both measure profitability but from different reference points — confusing them leads to pricing errors.

ConceptFormulaReference PointExample (Cost $60, Price $100)
Gross Margin(Price − Cost) ÷ PricePercentage of selling price($100 − $60) ÷ $100 = 40%
Markup(Price − Cost) ÷ CostPercentage of cost($100 − $60) ÷ $60 = 66.7%
Gross ProfitPrice − CostAbsolute dollar amount$100 − $60 = $40
Net Margin(Net Profit) ÷ RevenueAfter ALL expensesRequires full income statement

Margin and markup are not the same. A 50% markup does NOT mean a 50% margin — it means a 33% margin. Always clarify which metric is being used in pricing conversations.

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Frequently Asked Questions

What is the difference between profit margin and markup?

Margin% = (profit ÷ price) × 100; markup% = (profit ÷ cost) × 100. Same numbers, different denominator (price vs cost).

What is a good profit margin?

It depends on industry and overhead. Rough gross ranges: SaaS 70–85%, services 30–60%, e-commerce/retail 20–40%, grocery 1–3%. Compare to peers.

What is gross margin vs. net margin?

Gross margin uses COGS only: (revenue − COGS) ÷ revenue. Net margin uses all expenses: net income ÷ revenue.

How do I calculate the selling price for a target margin?

Target price = cost ÷ (1 − margin). Example: cost $30, margin 40% → $30 ÷ 0.60 = $50.

Why do marketplace fees change my margin so much?

Fees reduce profit but margin is measured against price. Add fees/shipping/returns into per-unit cost, then margin = (price − total cost) ÷ price.

Can I use this calculator for services (not products)?

Yes. Use your delivery cost (time × internal hourly cost + tools + subcontractors) as 'cost' and your client price as 'price.'

Privacy, accuracy, and trust

Privacy

Profit Margin Calculator keeps typical inputs on your device—nothing is uploaded to EverydayTools servers for core calculations.

Profit margin calculations shown are based on gross figures (revenue minus cost of goods sold). They do not account for operating expenses, taxes, interest, or other deductions needed to calculate net income. Consult a qualified accountant or financial advisor for full financial analysis. Financial results are estimates for planning only — not tax, legal, or investment advice. Verify with your employer, institution, or a qualified professional.

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Reviewed by EverydayTools Editorial Team on 2026-05-03.

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