How it works
If total cost is $60 and selling price is $100, unit profit is $40. Profit margin is 40% of selling price, while markup is approximately 66.67% of cost.
Use consistent pre-tax figures where appropriate. This tool does not automatically account for tax liabilities, payment charges or every operating expense.
Frequently asked questions
What is the difference between margin and markup?
Margin divides profit by selling price; markup divides profit by cost.
Can I include extra expenses?
Yes. Add per-unit expenses in the additional costs field.
Profit margin and markup explained
Margin divides profit by the selling price, while markup divides the same profit by the cost. A product costing $60 and selling for $100 generates $40 profit, 40% margin and approximately 66.67% markup.
Use consistent tax-exclusive costs and prices when appropriate. The calculator does not automatically include overheads, tax or future expenses. To simulate recurring contributions over time, use the compound interest calculator.
Calculate selling price from markup or a target profit margin
Switch to Price from target markup when you know the purchase cost, additional unit expenses and a desired markup percentage. The formula is selling price = (cost + extra cost) × (1 + markup ÷ 100). For a $65 total unit cost and a 20% markup, the price is $78, with a $13 profit. That yields a margin of about 16.67%, not 20%.
Switch to Price from target margin for a percentage measured on the selling price. The formula becomes selling price = total unit cost ÷ (1 − target margin ÷ 100). A $65 cost at a target margin of 35% requires a $100 selling price. Margins of 100% or above cannot be computed with positive costs by this formula. These are gross unit estimates: they do not automatically include business income taxes or overhead beyond the amounts entered.
To estimate the number of sales required to cover fixed costs, use the Break Even Calculator. Margin measures profit relative to the sale price, whereas break-even considers fixed costs and sales volume.