Skip to content

Profit Margin Calculator

Start from the numbers you have. See the profit, the margin on price, and the markup on cost.

Gross profit

$18.00

Margin is profit divided by price. Markup is the same profit divided by cost.

Margin compared with markup
MeasureMarginMarkup
Divided byPriceCost
This result60.00%150.00%
Cost
$12.00
Price
$30.00
Gross profit
$18.00

The guide walks through price, cost, and margin together.

Pricing for Profit

Or get the free Cash Flow ebook

Products

Product 1
Product 2
Product 3

Products

Product costs, prices, and profit
ProductCostPriceProfitMarginMarkup
Candle$8.00$18.00$10.0055.56%125.00%
Soap$4.00$12.00$8.0066.67%200.00%
Box$6.00$15.00$9.0060.00%150.00%
Total$18.00$45.00$27.0060.00%150.00%

How it's calculated

Gross profit is price minus cost. Margin divides that profit by the price. Markup divides it by the cost. When you know the cost and the margin, the price is the cost divided by 1 minus the margin. When you know the price and the margin, the highest cost is the price times 1 minus the margin. The product table adds the rows, then applies the same two divisions to the totals.

Margin = (price − cost) ÷ price
Markup = (price − cost) ÷ cost

Reviewed by WH2L Digital. Last reviewed October 31, 2026.

Questions

What is the difference between margin and markup?

Margin is profit divided by the selling price. Markup is the same profit divided by the cost. A 60% margin is a 150% markup, because the profit is compared with a smaller number.

How is the price for a target margin calculated?

Price equals cost divided by 1 minus the margin. A 60% margin on a $12 cost needs a $30 price, because $18 of profit is 60% of $30.

How do several products add up?

The table adds each cost and each price. Overall margin is total profit divided by total price. Overall markup is total profit divided by total cost.

Educational estimates only, not financial advice.