Profit margin calculator

Subtract the cost from the selling price to get gross profit, then divide that profit by the selling price and multiply by 100. An item that costs $60 and sells for $100 has a profit of $40, so the margin is 40 ÷ 100 = 40%. Margin is always a share of the selling price.

Both use the same profit, but margin divides it by the selling price while markup divides it by the cost. The $60 item sold for $100 has a 40% margin and a 66.67% markup. A 50% markup gives only a 33.3% margin, which is why setting prices by markup and reading results as margin goes wrong.

Yes. If the cost is higher than the selling price you make a loss and the margin is negative. A $120 cost sold for $100 loses $20, which is a margin of −20% and a markup of −16.67%. The calculator shows these negative values instead of an error so you can see how large the loss is.

Markup divides profit by cost, and dividing by zero has no answer, so the calculator shows a dash. The margin still works: if you sell something that cost nothing for $50, the profit is $50 and the margin is 100%. Enter a cost above 0 to see a markup percentage.

It is gross margin, based only on the cost you enter. Net margin also subtracts overheads such as rent, wages, shipping, fees and tax. To estimate net margin, add those costs into the cost field or subtract them from the profit yourself before dividing by the selling price.