Profit Margin Calculator
Profit margin tells you how much of each sale you actually keep. Enter what you sold something for and what it cost you, and this shows both your profit and your margin as a percentage.
Note: Margin is profit as a share of revenue. Markup (profit as a share of cost) is a different number — don't confuse the two when pricing.
How this calculator works
Profit margin is your profit expressed as a percentage of revenue. The calculator subtracts your cost from your revenue to find the profit, then divides that profit by the revenue and multiplies by 100. Margin is always measured against the sale price, which is what makes it different from markup — a distinction that catches a lot of people out when pricing.
Worked example
Sell something for $1,000 that cost you $600 and your profit is $400. Divided by the $1,000 sale price, that is a 40% profit margin. Note that the markup is higher: $400 on a $600 cost is a 67% markup. Same deal, two very different percentages.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price; markup is profit as a share of the cost. A 50% markup is only a 33% margin, so be clear which one you are quoting.
What is a good profit margin?
It varies hugely by industry. Software can run above 80%, while grocery retail may be under 5%. Compare yourself to others in your own sector rather than to a universal target.
Should cost include all my expenses?
This calculates gross margin from direct cost. For net margin, include overheads like rent, salaries, and marketing in the cost figure.