💰 Finance calculator

Margin Calculator

Calculate profit margin, markup percentage, gross profit, required selling price, or cost from any two known values — five modes in one tool. See a visual revenue-cost-profit breakdown, a margin health rating, and a plain-English explanation of every result.

Choose a margin mode

Pick what you want to find. Enter the two values you already know and click Calculate.

Know cost and selling price. Find your gross profit margin as a percentage of revenue.

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Total cost of the item or service
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Price charged to the customer

Know cost and selling price. Find your markup — profit as a percentage of cost.

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Total cost of the item or service
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Price charged to the customer

Know cost and target margin. Find the selling price you need to hit that margin.

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Total cost of the item or service
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The gross margin % you want to achieve

Know cost and selling price. Find your gross profit in dollar terms.

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Total cost of the item or service
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Price charged to the customer

Know selling price and target margin. Work backwards to find the maximum allowable cost.

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The price you will charge customers
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The gross margin % you need

Margin vs markup

Margin = Profit ÷ Revenue × 100
Markup = Profit ÷ Cost × 100
Same profit, different denominators — margin is always lower than markup for the same transaction.

Five modes at a glance

Know cost + price → find margin or markup or profit
Know cost + target margin → find required price
Know price + target margin → find max cost

Tip: "Find Cost" mode is useful for procurement and supplier negotiations — enter your selling price and required margin to instantly know the maximum you can pay for the product while still hitting your target.
This calculator computes gross profit margin only — it does not account for operating expenses, taxes, or overhead. Gross margin ≠ net profit margin. Use gross margin as a starting point, then subtract operating costs for a true picture of profitability.

Margin vs markup — the key difference

Margin and markup both measure profitability but use different bases — and they are frequently confused in business pricing conversations.

Profit margin = (Revenue − Cost) ÷ Revenue × 100
Profit as a % of what you charge the customer
Markup = (Revenue − Cost) ÷ Cost × 100
Profit as a % of what you paid for the item

For the same transaction (cost $60, price $100), margin is 40% while markup is 66.7%. Margin is always the lower number. If someone says "we want 40% margin" and you price to 40% markup, you will always undercharge — this is one of the most common and costly pricing mistakes in small business.

Cost Price Profit Margin Markup
$60$100$4040.0%66.7%
$75$100$2525.0%33.3%
$50$100$5050.0%100.0%
$80$100$2020.0%25.0%

All five formulas

Gross profit = Revenue − Cost
Profit margin = Profit ÷ Revenue × 100
Markup = Profit ÷ Cost × 100
Required selling price = Cost ÷ (1 − Margin ÷ 100)
Maximum cost = Revenue × (1 − Margin ÷ 100)

Margin benchmarks by industry

Grocery / supermarket: 2–5% net, 20–30% gross
Restaurant / food service: 3–9% net, 60–70% gross (on food cost)
Retail apparel: 4–13% net, 40–60% gross
Software / SaaS: 15–30% net, 60–80% gross
Consulting / services: 20–40% net, 50–70% gross
E-commerce (non-food): 5–20% net, 30–50% gross
Manufacturing: 5–10% net, 20–40% gross

Gross margin and net margin differ significantly because operating expenses (rent, salaries, marketing, logistics) sit between them. A 60% gross margin can easily become a 10% net margin after operating costs.

Frequently asked questions

What is the difference between margin and markup?

Margin divides profit by revenue (selling price). Markup divides profit by cost. For cost $60 and price $100: margin = $40 ÷ $100 = 40%, markup = $40 ÷ $60 = 66.7%. Margin is always lower than markup for the same transaction. Always clarify which metric someone means in a pricing conversation.

How do I calculate the selling price I need for a target margin?

Use the formula: Selling price = Cost ÷ (1 − target margin ÷ 100). For a $60 cost and 40% target margin: $60 ÷ (1 − 0.40) = $60 ÷ 0.60 = $100. Use the Selling Price mode in this calculator — enter cost and target margin.

Does a discount reduce my margin?

Yes — discounting revenue while cost stays fixed reduces your margin. A 10% discount on a $100 item (cost $60) drops revenue to $90. New margin = ($90 − $60) ÷ $90 = 33.3% — down from 40%. At larger discounts, margin compresses rapidly. Use the Discount Calculator alongside this tool.

Is gross margin the same as net profit margin?

No. Gross margin = (Revenue − Cost of Goods Sold) ÷ Revenue. Net margin = (Revenue − All expenses including operating costs, tax) ÷ Revenue. This calculator computes gross margin only. Net margin requires full P&L data.

What is a good profit margin?

It depends heavily on industry. Grocery operates on 2–5% net margin; software on 15–30%. For gross margin, most product businesses aim for 40–60% to cover operating costs and still generate net profit. The best benchmark is your industry's median — not a universal number.

Related finance calculators

These tools pair naturally with margin analysis.

Discount Calculator See how a percentage discount erodes your gross margin — essential for clearance and promotional pricing. Percentage Calculator Calculate any percentage quickly — useful for rate comparisons and cost ratio analysis. Cashback Calculator Estimate the effective margin impact of offering cash back rewards on card-based purchases. Basis Points Calculator Understand small margin changes in basis points — useful for financial product pricing.

Disclaimer

This calculator computes gross profit margin and markup only. It does not account for operating expenses, SG&A, depreciation, interest, or taxes. Gross margin is not the same as net profit margin. Use these figures as a starting point for pricing decisions — consult an accountant for full profitability analysis.