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.
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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.
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.
Profit margin is the percent of revenue that is profit after costs. Formula: margin% = (price − cost) ÷ price × 100 (profit = price − cost).
Key takeaways: margin uses price as the denominator; markup uses cost; target price for a margin is cost ÷ (1 − margin).
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).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.
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.
The calculator shows: gross profit (revenue − cost), gross margin % ((profit ÷ revenue) × 100), and markup % ((profit ÷ cost) × 100).
Enable 'find selling price' mode: enter cost and target margin %, and the tool calculates the minimum selling price to achieve that margin.
Input
Revenue: $50 · Cost: $30Output
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.
Input
Cost: $25 · Target margin: 50%Output
Required selling price: $50If margin = (price − cost) ÷ price = 0.50, then price = cost ÷ (1 − margin) = $25 ÷ 0.50 = $50.
Input
Selling price: $40 · Product cost: $18 · Platform fee: 15% ($6) · Shipping: $4Output
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.
Common real-world scenarios where this tool saves time.
E-commerce sellers
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
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
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.
Margin and markup both measure profitability but from different reference points — confusing them leads to pricing errors.
| Concept | Formula | Reference Point | Example (Cost $60, Price $100) |
|---|---|---|---|
| Gross Margin | (Price − Cost) ÷ Price | Percentage of selling price | ($100 − $60) ÷ $100 = 40% |
| Markup | (Price − Cost) ÷ Cost | Percentage of cost | ($100 − $60) ÷ $60 = 66.7% |
| Gross Profit | Price − Cost | Absolute dollar amount | $100 − $60 = $40 |
| Net Margin | (Net Profit) ÷ Revenue | After ALL expenses | Requires 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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Margin% = (profit ÷ price) × 100; markup% = (profit ÷ cost) × 100. Same numbers, different denominator (price vs cost).
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.
Gross margin uses COGS only: (revenue − COGS) ÷ revenue. Net margin uses all expenses: net income ÷ revenue.
Target price = cost ÷ (1 − margin). Example: cost $30, margin 40% → $30 ÷ 0.60 = $50.
Fees reduce profit but margin is measured against price. Add fees/shipping/returns into per-unit cost, then margin = (price − total cost) ÷ price.
Yes. Use your delivery cost (time × internal hourly cost + tools + subcontractors) as 'cost' and your client price as 'price.'
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.
Your cost to produce or acquire the product.
The price you charge customers. Cost + Selling → profit, margin, markup.
Cost + Markup % → Selling = Cost × (1 + Markup/100)
Cost + Target Margin % → Selling = Cost ÷ (1 − Margin/100)
Show price before/after tax and margin impact.
Enter values to calculate margin
Cost is required. Add selling price, markup %, or target margin %.