Profit Margin Calculator
Calculate profit margin, markup percentage, and gross profit instantly. Understand the difference between margin and markup, set profitable prices, and maximize your business earnings.
Inputs
What you pay to acquire the product
What you charge the customer
Results
Selling Price$100.00
Profit$50.00
Profit Margin
50.00%Profit ÷ Selling Price
Markup
100.00%Profit ÷ Cost
Margin vs. Markup: Understanding the Difference
| Markup % | Margin % | Example ($50 cost) |
|---|---|---|
| 15% | 13.04% | $57.50 |
| 25% | 20.00% | $62.50 |
| 50% | 33.33% | $75.00 |
| 75% | 42.86% | $87.50 |
| 100% | 50.00% | $100.00 |
| 150% | 60.00% | $125.00 |
| 200% | 66.67% | $150.00 |
A common mistake is confusing markup and margin. A 50% markup results in only a 33.33% margin, not 50%. Understanding this difference is critical for profitable pricing.
Why Use Our Profit Margin Calculator?
Many business owners confuse profit margin with markup, leading to pricing errors that eat into profits. Our calculator shows you both metrics side-by-side, helping you set prices that actually achieve your profit goals.
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit divided by selling price. Markup is profit divided by cost. They give different percentages for the same profit amount.
Which is more important?
Both are important. Margin shows profitability as percentage of revenue. Markup is useful for pricing decisions.
What is a good profit margin?
It varies by industry. Retail typically sees 2-10%, restaurants 3-9%, while software companies can see 70%+ margins.