Profit Margin Calculator: Gross Margin & Markup

Calculate gross profit, profit margin % and markup % from your cost and selling price, or work backwards to the price you need for a target margin or markup.

Profit margin and markup formulas

Gross profit = Selling price − Cost
Profit margin % = Gross profit ÷ Selling price × 100
Markup % = Gross profit ÷ Cost × 100
Price for a target margin = Cost ÷ (1 − Margin %/100)
Price for a target markup = Cost × (1 + Markup %/100)

Example: an item costs $60 and sells for $100. Gross profit is $40, the margin is 40% (40 ÷ 100) and the markup is 66.67% (40 ÷ 60).

Margin vs markup

They use the same profit but divide by different numbers: margin by the price, markup by the cost. Markup is always the bigger number. Mixing them up is a common pricing mistake: adding a 40% markup to a $60 cost gives $84, which is only a 28.6% margin.

Margin	Equivalent markup
10%	11.11%
20%	25%
25%	33.33%
30%	42.86%
40%	66.67%
50%	100%

Gross, operating and net margin

This calculator gives gross margin: price minus the direct cost of the item. Operating margin also subtracts running costs such as rent and wages, and net margin subtracts everything including interest and tax. The same formula applies: the profit figure divided by revenue.

Trading on margin? That’s a different thing: see the forex and CFD margin calculator.

ChartWatch is independent and not affiliated with TradingView, any broker or exchange. This calculator uses only the numbers you enter and runs in your browser. Results are estimates before taxes and any costs you leave out. It is a calculation tool, not financial advice.

FAQ

How do you calculate profit margin?

Subtract the cost from the selling price to get gross profit, divide by the selling price and multiply by 100. A $60 item sold for $100 has a 40% margin.

What is the difference between margin and markup?

Margin divides profit by the selling price; markup divides profit by the cost. A $60 item sold for $100 has a 40% margin but a 66.67% markup.

How do I price for a 30% margin?

Divide the cost by 0.70. A $70 cost needs a $100 price for a 30% margin.

What is a good profit margin?

It varies widely by industry. Compare with businesses that have a similar cost structure.

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