Free calculator
Profit Margin Calculator
Work out your margin from a cost and a price — or the price you need to hit a target margin. Markup is shown alongside, because they are not the same number.
Margin
33.33%
- Cost
- $100.00
- Selling price
- $150.00
- Profit
- $50.00
- Markup
- 50%
A worked example
Something costs you $100 and you sell it for $150. The profit is $50 either way — but expressed against the price it is a 33.33% margin, and against the cost it is a 50% markup.
| Cost | $100.00 |
|---|---|
| Price | $150.00 |
| Margin / markup | 33.33% / 50% |
To convert: margin = markup ÷ (1 + markup). To go the other way, markup = margin ÷ (1 − margin).
Common questions
- What is a good profit margin?
- It depends entirely on the trade. Grocery retail runs on single digits and survives on volume; software and consultancy often clear 70% or more. Compare yourself with your own sector rather than with an average.
- How do I calculate margin?
- Subtract the cost from the price, then divide by the price and multiply by 100. On a $150 sale of something that cost $100: 50 ÷ 150 = 33.33%.
- Can a margin be more than 100%?
- No. Margin is a share of the selling price, so it approaches 100% only as cost approaches zero and can never exceed it. Markup has no such ceiling — a 300% markup is perfectly ordinary.
- Is this gross or net margin?
- Gross. It counts the direct cost of the thing sold. Net margin also takes off overheads, wages, rent and tax, and is always lower.