Profit margin & markup calculator
Get your profit, margin and markup from cost and price — or find the price that hits a target margin or markup.
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How it’s calculated
Margin and markup both describe profit, but against different bases: margin is profit as a share of the selling price, markup is profit as a share of the cost. A 25% markup equals a 20% margin.
Profit = Price − CostMargin = Profit ÷ Price × 100Markup = Profit ÷ Cost × 100Price for a target margin = Cost ÷ (1 − margin ÷ 100)Price for a markup = Cost × (1 + markup ÷ 100)
Frequently asked questions
What is the difference between margin and markup?
Margin is profit divided by the selling price; markup is profit divided by the cost. Buying at 80 and selling at 100 is a 20% margin but a 25% markup.
How do I calculate the price for a target margin?
Divide the cost by 1 minus the margin. For a 40% margin on a cost of 60: 60 ÷ 0.60 = 100.
What is a good profit margin?
It varies widely by industry and business model. Service businesses with low direct costs often have higher margins than retail or manufacturing. Compare with benchmarks for your sector.
Should I include VAT or sales tax in the price?
No — calculate margins on net prices excluding VAT or sales tax, because the tax is passed on to the tax authority and isn’t profit.
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Results are estimates for general information only and are not tax, legal or financial advice.