Profit Margin Calculator
Calculate profit margin and markup, or find the selling price required for a desired margin or markup on cost.
Enter cost and selling price to compare profit margin with markup on cost.
Result
Enter the values to calculate your result.
This calculation does not include taxes, fees, or other expenses. Add them to your cost when applicable.
What profit margin means
Profit margin is the percentage of the final selling price that remains as profit after cost. If an item costs 1,000 and sells for 4,000, profit is 3,000 and the profit margin is 75%.
For a meaningful result, cost should include the per-unit expenses relevant to your pricing decision, such as purchasing, manufacturing, packaging, or transaction fees.
Profit margin (%) = (Selling price − Cost) ÷ Selling price × 100
What markup means
Markup compares profit with the product's cost. It matches the common pricing idea “I want to add 100% to cost”: a 100% markup on a cost of 1,000 adds 1,000 in profit and produces a selling price of 2,000.
Markup (%) = Profit ÷ Cost × 100
Profit margin vs. markup
Both calculations use the same profit but divide it by different amounts. Margin uses the selling price; markup uses cost. A 100% markup therefore creates a 50% margin, while a 300% markup creates a 75% margin.
This distinction prevents a common pricing mistake. A 75% target margin does not mean adding 75% to cost: reaching that margin requires a selling price equal to four times cost.
Selling price for a desired margin
The “Desired margin” mode finds the price where profit is exactly the selected share of final revenue.
Selling price = Cost ÷ (1 − Desired margin ÷ 100)
Selling price from a desired markup
Use “Desired markup” when you want to add a percentage directly to cost. The calculator finds profit from cost first, then adds that profit to the selling price.
Selling price = Cost × (1 + Desired markup ÷ 100)
Practical pricing examples
At a cost of 1,000, a 100% markup produces a 2,000 selling price and a 50% profit margin. A 300% markup produces a 4,000 selling price, 3,000 in profit, and a 75% margin.
A 100% profit margin is not possible when cost is positive because it would require all revenue to be profit and none to cover cost. A markup of 100%, 300%, or more is mathematically valid.
Frequently asked questions
What is the difference between profit margin and markup?
Profit margin divides profit by selling price. Markup divides profit by cost. Because the denominators differ, the two percentages are not the same.
If an item costs 1,000 and sells for 2,000, is that 100% profit?
It is a 100% markup because the 1,000 profit equals cost. Profit margin is 50% because profit represents half of the 2,000 selling price.
Why can't profit margin reach 100%?
When cost is positive, part of the selling price must cover that cost. A 100% margin would require an infinite price, so a desired margin must be at least 0% and less than 100%.
What does a 300% markup mean?
It means adding three times cost as profit. At a cost of 1,000, profit is 3,000 and the selling price is 4,000. The resulting profit margin is 75%.
Which mode should I use to set my selling price?
Use “Desired markup” when your percentage is based on cost. Use “Desired margin” when profit should represent a particular percentage of the final selling price.
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