Business
Profit Margin Calculator
Calculate profit, margin and markup from a cost and selling price — and see why margin and markup are never the same number.
Updated 14 Oct 2026
Selling at 100.00 with a cost of 60.00 gives 40.00 profit — a 40.00% margin and a 66.67% markup. Margin is measured against the selling price; markup is measured against cost, which is why the two figures differ.
Enter your cost and selling price. The calculator returns the profit, the margin as a percentage of the selling price, and the markup as a percentage of cost.
What is the Profit Margin Calculator?
Margin and markup both describe the gap between cost and selling price, but they divide by different things. Margin divides profit by the selling price; markup divides it by cost.
Confusing them is one of the most expensive mistakes in small-business pricing. A "50% markup" and a "50% margin" are very different prices.
How to use the Profit Margin Calculator
- Enter what the item cost you.
- Enter what you sell it for.
Formula
Margin = (profit ÷ revenue) × 100
Markup = (profit ÷ cost) × 100
Because revenue is always larger than cost on a profitable sale, the markup percentage is always larger than the margin percentage. A 50% markup is a 33.3% margin. A 100% markup is a 50% margin.
How the calculation works
Both figures use the same profit in the numerator. Only the denominator changes. Margin answers "what share of my sale price is profit" — the question that matters for financial reporting. Markup answers "how much did I add on top of cost" — the question that matters when setting a price.
Worked example
An item costing ₹60, sold at ₹100:
- Profit = 100 − 60 = ₹40
- Margin = 40 ÷ 100 × 100 = 40%
- Markup = 40 ÷ 60 × 100 = 66.67%
Same ₹40 profit, two very different percentages.
Uses and benefits
- Check whether a price achieves the margin you actually need.
- Translate a supplier's markup into the margin it gives you.
- Compare profitability across products with different cost bases.
Frequently asked questions
Margin is profit as a percentage of the selling price. Markup is profit as a percentage of cost. On an item costing ₹60 sold at ₹100, the margin is 40% and the markup is 66.67% — the same ₹40 profit measured against different bases.
No, and assuming so will cost you money. A 50% markup gives a 33.3% margin. To achieve a 50% margin you need a 100% markup — you double the cost.
It varies enormously by industry. Grocery retail often runs on single-digit gross margins; software can exceed 80%. Compare against benchmarks for your own sector rather than a general figure.
References
This calculates gross margin on a single unit. Net margin additionally accounts for overheads, salaries, marketing and tax, and is always lower.