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Profit Margin Calculator

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

  • profit
  • margin
  • markup
  • selling price

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

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Margin in pricing context

Explore the profit margin calculator result visually while keeping this page's detailed guidance and examples.

Margin in pricing context
32%
Loss or lowThinHealthyStrongVery high

Use this result well

  1. 1Verify the calculator inputs.
  2. 2Compare the key result relationships.
  3. 3Review the page guidance before acting.

Margin uses selling price while markup uses cost.

Calculator guide

Introduction

The Profit Margin Calculator helps sellers, freelancers, ecommerce teams, and businesses compare cost, selling price, profit, margin, markup, cost share, and pricing sensitivity.

What is profit margin?

Profit margin shows what percentage of selling price remains as profit after cost is subtracted. It is useful for pricing products, services, jobs, marketplace listings, and gross-profit planning.

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 related but not the same.

Variable explanations

Understand what each input and result means before calculating.

Cost price

The cost to buy, make, ship, fulfill, 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.

Cost share

The percentage of selling price consumed by entered cost.

Pricing sensitivity

A quick look at how margin changes if selling price moves down or up.

Reviewed by the Calculator.org.in Editorial Team

Formula behavior, validation cases, explanatory examples, and cited sources are checked before publication. This review supports educational accuracy and is not a substitute for qualified professional advice.

Last reviewed: 2026-08-03

Review process

Formula guide

See the calculation logic, variable definitions, and practical meaning.

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.

Markup from margin

Markup = Margin / (1 - Margin)

  • Margin is used as a decimal.

This explains why a 40% margin equals a 66.67% markup.

Cost share

Cost Share = 100 - Profit Margin

  • Margin is expressed as a percentage.

Cost share shows how much of each revenue dollar is consumed by entered cost.

Worked examples

Follow realistic inputs through the calculation step by step.

1

Worked example

Retail example

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

Worked example

Ecommerce example

  1. 1Include product cost, packaging, platform fees, payment fees, and shipping.
  2. 2Use selling price as the revenue value.
  3. 3Compare margin before and after marketplace fees.
3

Worked example

Service business example

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

Worked example

Freelancer pricing example

  1. 1Estimate project cost from time and expenses.
  2. 2Choose a target margin.
  3. 3Solve for selling price.
  4. 4Check whether the result fits the market.
5

Worked example

Target margin pricing

  1. 1Select selling price from desired margin.
  2. 2Enter cost and target margin.
  3. 3Review selling price and markup needed to reach that margin.
6

Worked example

Margin versus markup training

  1. 1Use the conversion table.
  2. 2Notice margin uses selling price.
  3. 3Notice markup uses cost price.
  4. 4Do not apply a margin as if it were markup.
7

Worked example

Price sensitivity check

  1. 1Review the pricing sensitivity table.
  2. 2See how a 10% lower or higher selling price affects profit and margin.
  3. 3Use it before discounting.

Common mistakes

Avoid these common input and interpretation errors.

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.

Discounting without checking margin

A small price cut can produce a larger margin drop when costs stay fixed.

Mixing gross and net margin

This calculator is gross-style unless you include all net-cost items in the cost price.

Frequently asked questions

Quick answers to the questions users ask most often.

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.
What costs should ecommerce sellers include?
Include product cost, packaging, platform fees, payment fees, fulfillment, shipping, and expected returns when relevant.
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.
What is cost share?
Cost share is the portion of selling price consumed by entered cost.
What does profit per dollar mean?
It estimates how much profit is retained from each $1 of revenue.
Why is markup higher than margin?
Markup divides profit by cost, while margin divides profit by 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 does the pricing sensitivity table show?
It shows estimated margin and profit if selling price moves 10% lower or higher.
Can this calculate break-even volume?
No. Use a break-even calculator when fixed costs and unit volume are needed.
What related calculator should I use next?
Use ROI Calculator for return on investment and Markup Calculator for markup-first pricing.
Is this business advice?
No. It is an educational calculator and not business, tax, or financial advice.

References

Sources used to support the calculator guidance.

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Version history

A transparent record of calculator content updates.

Updated 2026-08-03
  • 1.1.0 · 2026-08-03

    Added margin-markup conversion, cost share, profit per dollar, per-revenue view, pricing sensitivity, cost checklist, and expanded pricing guidance.

  • 1.0.0 · 2026-07-04

    Initial production release with profit, margin, markup, selling price, and cost price modes.