Profit Margin Calculator
This calculator can help you determine the selling price for your products to achieve a desired profit margin.
How the profit margin calculator works
It subtracts cost from revenue to find gross profit, then expresses it two ways: as a margin (profit over price) and as a markup (profit over cost), which are easy to confuse but mean different things.
Worked example: with revenue (selling price) of $100 and cost of goods of $60, the profit margin calculator shows profit margin of 40.0%.
- Gross profit
- $40
- Profit margin
- 40.0%
- Markup
- 66.7%
- Cost ratio
- 60.0%
The formula
Profit = revenue − cost. Margin = profit ÷ revenue × 100. Markup = profit ÷ cost × 100.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the profit margin calculator
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price; markup is profit as a percentage of cost. The same sale always has a higher markup than margin.
What is a good profit margin?
It varies widely by industry — software runs high, groceries thin. Compare against typical margins for your sector rather than an absolute number.
How do I increase my profit margin?
Raise prices, lower the cost of goods, or shift the mix toward higher-margin products. Small price increases often lift margin more than equivalent cost cuts.
Is the Profit Margin Calculator free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.