Business Calculators
Profit Margin Calculator
Enter cost and selling price. Gross margin % (profit as a share of price) and markup % (profit as a share of cost) appear instantly, side by side, with profit per unit.
Gross margin is (selling price − cost) / selling price, and markup is (selling price − cost) / cost, so the same sale gives a smaller margin than markup. This calculator shows profit per unit, margin and markup from a cost and a price.
Method: a standard formula, shown on this page. No government rate or table is used.
Cite this page: TNAADO Tools, “Profit Margin Calculator”, https://tools.tnaado.ca/calculators/business/profit-margin/
Inputs
Result
Fill the form and press Calculate.
Margin to markup conversion table
| Gross margin | Markup needed |
|---|---|
| 10% | 11.1% |
| 20% | 25% |
| 25% | 33.3% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100% |
| 60% | 150% |
| 75% | 300% |
Frequently asked questions
What is the gross margin formula?
Gross margin % = (selling price − cost) ÷ selling price × 100. With a cost of $50 and a price of $100, profit is $50 and gross margin is 50 ÷ 100 = 50%.
What is the markup formula?
Markup % = (selling price − cost) ÷ cost × 100. With a cost of $50 and a price of $100, markup is 50 ÷ 50 = 100%.
What is the difference between margin and markup?
Both use the same profit, but margin divides it by the selling price and markup divides it by the cost. For any profitable sale, markup is always the larger number. A 50% margin is a 100% markup, and a 25% markup is only a 20% margin.
How do I convert margin to markup, and markup to margin?
Markup = margin ÷ (1 − margin). Margin = markup ÷ (1 + markup). Using decimals: a 20% margin (0.20) is 0.20 ÷ 0.80 = 25% markup, and a 25% markup (0.25) is 0.25 ÷ 1.25 = 20% margin.
How do I set a price for a target margin?
Divide cost by one minus the target margin. A $40 cost at a 30% margin is $40 ÷ 0.70 = $57.14. Adding 30% to cost instead ($52.00) would only give a 23.1% margin. For cost-plus and target-margin pricing, use the pricing calculator.
Is gross margin the same as net profit margin?
No. This calculator uses only the per-unit cost you enter, so the result is a gross margin. Net profit margin also subtracts overhead, fees, ad spend and taxes. If your cost field excludes those, your real margin will be lower.