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Profit Margin Calculator

Calculate gross profit, margin and markup.

$
$
Gross profit$40.00
Markup66.67%
Profit margin
40%

Profit margin shows what share of your selling price is profit. Markup shows how much you added on top of cost. They describe the same profit from two different starting points, which is why they are often confused.

Knowing both helps you set prices that cover overhead and grow your business.

Formula

  • Gross profit = Revenue − Cost
  • Margin % = Gross profit ÷ Revenue × 100
  • Markup % = Gross profit ÷ Cost × 100

Example

An item costing $60 that sells for $100 earns $40 gross profit — a 40% margin and a 66.67% markup.

Frequently asked questions

What is the difference between margin and markup?

Margin is profit divided by the selling price; markup is profit divided by cost. A 50% markup equals a 33.3% margin.

What is a good profit margin?

It varies widely by industry. Retail margins can be under 10% while software and services can exceed 50%.

Does this include overhead?

This is gross margin. For net profit after operating expenses and tax, use the profit calculator.