Profit margin & markup calculator

Enter your cost and selling price to see your profit, margin and markup — or work out the price you need for a target margin.

Profit
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Margin (profit / price)
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Markup (profit / cost)
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Price from a target margin

Required selling price
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Margin vs markup

Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. The same profit gives a smaller margin than markup, so it’s worth being clear which one you mean.

The formulas

Profit = price − cost. Margin = profit / price × 100%. Markup = profit / cost × 100%.

  • Example: cost 60, price 100. Profit 40, margin 40%, markup 66.7%.
  • The other way round: for a 30% margin on an item that costs 60, the price is 60 / 0.70 = 85.71.

Markup to margin

Margin = markup / (1 + markup). Some common values:

  • 25% markup = 20% margin
  • 33.3% markup = 25% margin
  • 50% markup = 33.3% margin
  • 100% markup = 50% margin

Margin and VAT or sales tax

Always work out your margin on prices excluding VAT or sales tax. The tax belongs to the government, not to your revenue: if a customer pays 120 including 20% VAT, your revenue is 100.

Frequently asked questions

What is a good profit margin?

It depends entirely on your industry and costs — there is no universal number. Compare against typical figures for your sector.

How do I price for a target margin?

Divide your cost by (1 minus the target margin as a decimal). For a 30% margin on a €60 cost, that’s 60 / 0.70. The calculator shows this under “Required selling price”.

Is a 50% markup the same as a 50% margin?

No. A 50% markup on a cost of 100 gives a price of 150 and a margin of 33.3%. For a 50% margin the price has to be 200, which is a 100% markup.