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Profit Margin Calculator

Calculate profit, profit margin, markup, selling price from margin, and cost price from margin.

Required for direct calculation and solving for selling price.

Required for direct calculation and solving for cost price.

Required when solving for selling price or cost price.

Status: initial

Results

Awaiting calculation

Seller pricing

Introduction

A profit margin calculator helps sellers, freelancers, and businesses compare cost, selling price, profit, margin, and markup.

What is profit margin?

Profit margin shows what percentage of selling price remains as profit after cost is subtracted.

Profit margin formula

Profit margin is profit divided by selling price, multiplied by 100. Markup uses profit divided by cost price, so margin and markup are not the same.

Variables explained

Cost price

The cost to buy, make, or deliver a product or service.

Selling price

The price charged to the customer.

Profit

Selling price minus cost price.

Profit margin

Profit as a percentage of selling price.

Markup

Profit as a percentage of cost price.

Desired margin

The target margin used to solve for price or cost.

Formula guide

Profit

Profit = Selling Price - Cost Price

  • Selling price is customer price.
  • Cost price is the cost to provide the item.

Profit is the amount left before any other costs not entered here.

Profit margin

Profit Margin = Profit / Selling Price x 100

  • Profit margin uses selling price as the denominator.

Margin shows profit as a share of revenue.

Markup

Markup = Profit / Cost Price x 100

  • Markup uses cost price as the denominator.

Markup shows how much the price is increased above cost.

Selling price from margin

Selling Price = Cost Price / (1 - Margin / 100)

  • Margin must be below 100%.

Use this when you know cost and desired margin.

Cost price from margin

Cost Price = Selling Price x (1 - Margin / 100)

  • Selling price must be greater than 0.

Use this when you know selling price and desired margin.

Worked examples

Retail example

  1. Cost price is 60.
  2. Selling price is 100.
  3. Profit is 40.
  4. Profit margin is 40% and markup is 66.67%.

E-commerce example

  1. Include product cost, packaging, platform fees, and shipping when estimating cost.
  2. Use selling price as the revenue value.
  3. Compare margin before and after marketplace fees.
  4. Margin can look higher if costs are omitted.

Service business example

  1. Cost can include labor, tools, subcontractors, and materials.
  2. Selling price is the client invoice amount.
  3. Margin shows how much revenue remains after direct cost.
  4. Overhead may need separate analysis.

Freelancer pricing example

  1. Estimate project cost from time and expenses.
  2. Choose a target margin.
  3. Solve for selling price.
  4. Check whether the result fits the market and your workload.

Common margin mistakes

Confusing margin and markup

A 40% margin is not the same as a 40% markup because they use different denominators.

Leaving out fees

Payment fees, marketplace fees, shipping, packaging, labor, and returns can reduce margin.

Using revenue as profit

Profit is revenue minus cost, not the full selling price.

Targeting impossible margins

Selling-price calculations require margin below 100%.

Ignoring overhead

Gross margin may not include rent, software, taxes, salaries, or other overhead.

FAQs

What is profit margin?
Profit margin is profit divided by selling price, multiplied by 100.
What is markup?
Markup is profit divided by cost price, multiplied by 100.
Are margin and markup the same?
No. Margin uses selling price as the denominator, while markup uses cost price.
How do I calculate profit?
Profit is selling price minus cost price.
How do I find selling price from margin?
Use selling price = cost price / (1 - margin / 100).
How do I find cost from margin?
Use cost price = selling price x (1 - margin / 100).
Can profit be negative?
Yes. If cost price is higher than selling price, profit and margin are negative.
Why must desired margin be below 100%?
At 100%, the selling price formula would divide by zero.
Does this include taxes?
Only if you include taxes in the cost price.
Does this include shipping?
Only if shipping is included in the cost price.
Is this gross margin or net margin?
This is a gross-style margin based on entered cost and selling price.
Can ecommerce sellers use it?
Yes, if all relevant product, platform, payment, and fulfillment costs are included.
Can freelancers use it?
Yes. Use project cost as cost price and client price as selling price.
What related calculator should I use next?
Use ROI Calculator for return on investment and Break-even Calculator for volume planning.
Is this business advice?
No. It is an educational calculator and not business, tax, or financial advice.

References

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Last updated and version history

Last updated: 2026-07-04

  • 1.0.0 (2026-07-04): Initial production release with profit, margin, markup, selling price, and cost price modes.