Profit Margin Calculator
Calculate gross profit, profit margin, and markup from a sale price and cost. See why margin and markup are not the same number.
Independently verified for accuracy
Calculator by Toolsloft ↗- Gross profit
- $40.00
- Profit margin
- 40.00%
- Markup
- 66.67%
This calculator turns a sale price and a unit cost into gross profit, profit margin, and markup. Use it to price a product, check whether a discount still clears your cost, or compare margin against markup so you quote the right number.
How this is calculated
Gross profit is revenue minus cost. Margin is gross profit divided by revenue, and markup is gross profit divided by cost, each expressed as a percentage. These are the standard accounting definitions, and the two percentages differ because they use a different base.
How to use
- Enter the revenue or selling price.
- Enter the cost of the item or service.
- Read the gross profit, profit margin, and markup.
Examples
- $100 price, $60 cost:
40% margin, 66.67% markup - $2,500 price, $1,800 cost:
28% margin
FAQ
- What is the difference between margin and markup?
- Margin measures profit as a share of the selling price, while markup measures it as a share of the cost. A 40% margin on a $100 sale ($60 cost) is the same dollar profit as a 66.67% markup.
- How do I calculate profit margin?
- Subtract cost from revenue to get gross profit, then divide gross profit by revenue and multiply by 100.
- Can margin be over 100%?
- No. Because margin is profit divided by revenue, it approaches but never reaches 100%. Markup has no upper limit.