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Accounting & finance tools

Profit margin calculator

Solves any two of cost, price, profit, margin and markup, then adds what real sellers pay (tax, discount, marketplace fees, shipping), gives the price needed for a target margin, and checks a whole product list at once.

In short

Profit margin is profit as a percentage of the selling price: (price − cost) ÷ price. Markup is profit as a percentage of cost, so it is always the larger number. A cost of 60 and a price of 100 is a 40% margin and a 66.7% markup. Enter any two values and this calculator finds the rest.

  • Margin and markup
  • Tax, fees, discount
  • Bulk product list
  • CSV
  • Runs in your browser

Private by design. Nothing you type is uploaded or saved. Add this tool to your phone or computer for one-tap access.

Currency

What do you know?

Margin is profit ÷ selling price. Markup is profit ÷ cost. Pick any two and the other three follow. A loss shows as a negative margin.

Margin before overhead. Gross margin counts only what the product cost. Rent, wages and other running costs are not in it, so a healthy gross margin is not the same as a profit after all costs.

Profit margin worksheet
Margin and markup · PKR
Margin
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Enter two values, such as cost and price, to see the margin and markup.

Margin is profit as a share of the selling price; markup is profit as a share of cost. Worked from the figures entered. Not accounting or tax advice.

Page last updated

How to use it

  1. On Margin & markup, choose the two values you know, such as cost and price, and type them in.
  2. Read the margin, markup, profit, cost and price, and the margin-to-markup table below them.
  3. Switch to Real selling price to add a discount, sales tax or VAT, a marketplace fee and shipping, and to find the price that gives a net margin you choose.
  4. Switch to Many products, paste a list of name, cost and price, and see every margin and the overall margin. Download it as a CSV.
  5. Copy the summary or download the sheet as an image.

How it calculates

Margin is profit divided by the selling price; markup is profit divided by cost. Any two of cost, price, profit, margin and markup fix the other three. In the real-price mode a discount comes off the label price first, tax is taken out of the price (or added on top) before margin is measured, a marketplace fee is a percentage of the price without tax, and shipping or other costs are added per unit. The price for a target net margin is (cost + per-unit costs) ÷ (1 − fee − margin), turned back into a label price.

For example, an item that costs 60 and sells for 100 earns a profit of 40, which is a margin of 40.0% (40 ÷ 100) and a markup of 66.7% (40 ÷ 60). Add real costs and the picture changes: an item that costs 40 and sells for 100 with a 10% marketplace fee and 5 of shipping keeps 45 a unit. That is a net margin of 45%, not the gross margin of 60%, and 450 on ten units. The figures are made up; yours come from what you type.

Who should use it

  • Shop owners and traders setting prices from what the goods cost
  • Online sellers who pay marketplace fees, shipping and ad costs on every sale
  • Students and accountants checking margin and markup formulas
  • Anyone who needs the selling price for a margin they want to earn

Who should not use this

  • Anyone who needs net profit after rent, wages and overheads; this measures margin on the product, not on the whole business
  • Businesses that price in several currencies at once and need conversion; amounts here are shown in one currency and not converted
  • Anyone preparing tax returns or statutory accounts; use your accounting records

Limitations

  • Gross margin counts only the cost you enter. Overheads such as rent, salaries and utilities are not included unless you add them to the cost.
  • A marketplace fee is treated as a percentage of the price without tax. If your platform charges on the tax-inclusive price, raise the fee percentage slightly.
  • The tool does not know your country’s tax rules. It applies the tax percentage you type, either included in the label price or added on top.
  • There are no industry benchmarks. A good margin depends on the trade, the volume and the overheads.
  • Nothing is uploaded or stored on a server. Clearing your browser data also removes the saved profile.

Common questions

What is the profit margin formula?
Profit margin % = (selling price − cost) ÷ selling price × 100. With a cost of 60 and a price of 100, the profit is 40 and the margin is 40 ÷ 100 = 40%. It is also called gross margin when only the cost of the goods is taken off.
What is the difference between margin and markup?
Margin divides profit by the selling price; markup divides profit by the cost. For the same sale, markup is always bigger. Selling at 100 what cost 60 is a 40% margin and a 66.7% markup. Mixing them up leads to prices that are too low.
How do I calculate margin from markup?
Margin = markup ÷ (1 + markup). A 50% markup gives 0.5 ÷ 1.5 = 33.3% margin. To go the other way, markup = margin ÷ (1 − margin): a 25% margin is a 33.3% markup.
How do I find the selling price for a 30% margin?
Divide the cost by (1 − 0.30). A cost of 70 gives 70 ÷ 0.70 = 100. Do not add 30% to the cost: 70 × 1.30 = 91 is only a 23% margin. The Real selling price mode also allows for tax, discount and marketplace fees.
What is the difference between gross and net profit margin?
Gross margin takes off only the direct cost of the goods. Net margin takes off every cost of the sale or of the business, such as fees, shipping, advertising, wages and rent. In the Real selling price mode, the net margin includes the fees and extras you enter.
What is a good profit margin?
There is no single number. Margins vary widely by trade, so compare yours with similar businesses and with your own overheads. A margin that looks high can still lose money once rent, wages and fees are paid, and a thin margin can work at high volume.
How do I calculate profit margin in Excel or Google Sheets?
With the cost in B1 and the price in B2, margin is =(B2-B1)/B2 and markup is =(B2-B1)/B1. Format the cell as a percentage. The calculator shows these formulas beside your result.
Is sales tax or VAT part of my revenue?
No. Tax you collect is passed to the government, so margin is measured on the price without tax. If your label price includes tax, tick the box and the tool removes it first: a price of 117 with 17% tax is 100 of revenue.

Guides that explain the rules

Margin vs markupBreak-even analysis explained

Related tools

Break-even calculatorInvoice generatorShop billing

This tool produces a document from the information you type. It does not give legal, tax or accounting advice, and it does not check that your figures or rates are right. See the disclaimer. Found a mistake? Report an error in a calculation.