Free Online Profit Margin Calculator

About Profit Margin Calculator

Profit margin and markup are two related but genuinely different percentages, and confusing them is a common pricing mistake — margin is profit as a percentage of the selling price, while markup is profit as a percentage of the cost. A 50% markup on a $60 cost gives a $90 price, but that same $90 price only represents a 33% margin, not 50% — the two numbers diverge more the higher they get, which trips up pricing decisions when the wrong one is used.

This tool calculates both from just two inputs — your selling price (or revenue) and your cost. Margin is calculated as (price − cost) ÷ price × 100, while markup is calculated as (price − cost) ÷ cost × 100. Both describe the same underlying profit dollar amount, just expressed relative to a different base number, which is exactly why they produce different percentages for the same transaction.

Margin is generally the more useful figure for understanding overall business profitability, since it directly relates to how much of each revenue dollar is actually profit — a business with a 40% margin keeps 40 cents of profit for every dollar of revenue. Markup is more commonly used when setting a price from a known cost, since it directly answers "how much do I add on top of what this costs me."

This is useful for pricing a product or service, checking whether a margin is healthy relative to industry norms, or simply understanding the real profitability of a transaction once cost is factored in — a $100 sale means very different things depending on whether the cost behind it was $20 or $80.

How it works

1. Enter your selling price and cost. The price you charge and what it actually cost you.
2. View margin and markup together. Both percentages calculated instantly from the same two numbers.
3. See the profit amount. The actual dollar profit behind both percentages.