Profit Margin Calculator

Calculate your profit margin — profit as a percentage of the selling price — and learn how it differs from markup.

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15% of 200 is
30

What is profit margin?

Profit margin expresses profit as a percentage of the selling price: margin = (selling price − cost) ÷ selling price × 100. It tells you how much of each sale you actually keep. It is different from markup, which measures profit against the cost price — the same profit gives a higher markup and a lower margin.

Real-world example

An item that costs 600 and sells for 900 earns 300 profit. The margin is 300 ÷ 900 = 33.3%, while the markup is 300 ÷ 600 = 50%. Same profit, two very different percentages — always state which you mean.

Pricing for a target margin

To hit a target margin, divide the cost by (1 − margin). For a 40% margin on a 600 cost: 600 ÷ 0.60 = a selling price of 1,000.

Frequently asked questions

Profit margin = ((Selling Price − Cost) ÷ Selling Price) × 100. It expresses profit as a percentage of the selling price.

Margin is profit as a percentage of the selling price; markup is profit as a percentage of cost. The same profit gives a higher markup and a lower margin.

Divide the cost by (1 − target margin). For a 40% margin on a 600 cost: 600 ÷ 0.60 = 1,000.

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