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VELNARO

Profit Margin Calculator

Enter your revenue and cost to see profit, profit margin, gross margin and markup. Switch the mode to work backwards from a target margin to the price you must charge.

Profit

$100.00

Profit margin

40%

Markup on cost

66.67%

Cost as % of revenue

60%

Revenue per 1 of cost

1.67

How this was worked out

  1. Step 1Profit = 250 − 150 = $100.00
  2. Step 2Margin = 100 ÷ 250 × 100 = 40%
  3. Step 3Markup = 100 ÷ 150 × 100 = 66.67%

Margin is profit as a share of revenue; markup is profit as a share of cost. They are not interchangeable.

Formula

Profit = revenue − cost Margin = (profit ÷ revenue) × 100 Markup = (profit ÷ cost) × 100

How it works

  1. 1Profit is simply what is left after costs.
  2. 2Margin expresses profit as a percentage of the selling price, which is how most accounts measure profitability.
  3. 3Markup expresses profit as a percentage of cost, which is how many people set prices.
  4. 4A 50% markup is only a 33.3% margin — the same profit, described against a different base.

Example

Input

Revenue $250, cost $150

Result

Profit $100, margin 40%, markup 66.7%

Frequently asked questions

It varies enormously by industry. Grocery retail runs on low single-digit margins, while software businesses often exceed 70%.

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