Profit Margin Calculator

Calculate profit margin, gross profit, and markup percentage based on cost and selling price. Free online financial calculator for businesses and individuals.

Cost Price ($)

Selling Price ($)

Result

Please check your inputs.

Enter the cost price of your product or service in the 'Cost' field (e.g., the amount you pay to produce or purchase it). Enter the selling price at which you sell the item in the 'Selling Price' field. Click 'Calculate' to instantly see your gross profit, profit margin percentage, and markup percentage. Review the results—gross profit shows your earnings per unit, profit margin tells you what percentage of revenue is profit, and markup shows the percentage increase over cost. Adjust either cost or selling price to explore different scenarios and optimize your pricing strategy.

📖 How to Use This Tool

Enter the cost price of your product or service in the 'Cost' field (e.g., the amount you pay to produce or purchase it).

Enter the selling price at which you sell the item in the 'Selling Price' field.

Click 'Calculate' to instantly see your gross profit, profit margin percentage, and markup percentage.

Review the results—gross profit shows your earnings per unit, profit margin tells you what percentage of revenue is profit, and markup shows the percentage increase over cost.

Adjust either cost or selling price to explore different scenarios and optimize your pricing strategy.

📝 What Is Profit Margin Calculator?

A profit margin calculator is a simple financial tool that helps you determine how much profit you're making on each sale relative to your costs. By entering just two numbers—cost and selling price—the tool instantly computes gross profit, profit margin percentage, and markup percentage. This allows business owners, freelancers, and even individuals to quickly assess pricing effectiveness and ensure they're not selling at a loss. Understanding your profit margin is critical for sustainable growth, as it reveals whether your pricing covers expenses and leaves room for reinvestment. Whether you're setting retail prices, quoting a project, or analyzing a product line, this calculator removes guesswork and provides clear, actionable numbers to support smarter financial decisions.

🧮 Formula

Gross Profit = Selling Price – Cost. Profit Margin (%) = (Gross Profit ÷ Selling Price) × 100. Markup (%) = (Gross Profit ÷ Cost) × 100. For example, if you sell an item for $100 that costs you $60, gross profit is $40, profit margin is 40%, and markup is 66.7%.

💡 Tips for Best Results

✨💡 Always include hidden costs — factor in shipping, packaging, and transaction fees when entering your cost to get a true profit picture.

✨📊 Compare margin vs. markup — they tell different stories; use margin for financial reporting and markup for pricing strategy.

✨🔄 Run multiple scenarios — tweak selling prices or costs to find the sweet spot between competitiveness and profitability.

✨📈 Monitor trends over time — regularly calculate margins on key products to spot cost increases or pricing drift early.

❓ Frequently Asked Questions

What is the difference between profit margin and markup?

Profit margin is the percentage of the selling price that is profit, while markup is the percentage increase from cost to selling price. For example, a 50% markup on a $100 cost gives a $150 price, but the profit margin on that sale is only 33.3%.

Can I use this calculator for services as well as products?

Absolutely. Just treat your time and materials as the 'cost' and your service fee as the 'selling price'. It works for project quotes, hourly rates, or any deliverable.

What should my profit margin be?

Target margins vary by industry — retail often runs 20–50%, services 30–60%, and luxury goods may exceed 80%. Research your sector and adjust based on your overhead, competitors, and growth goals.