Finance Tool

Profit Margin Calculator

Calculate gross margin, net margin, markup percentage, and profit amount instantly. Enter cost and revenue — or cost and desired margin — to find the selling price you need.

CalculatesGross & net margin
ComparesMargin vs. markup
ModeRevenue or target margin
Interactive Tool

Calculate Your Profit Margin

Cost ($)
Revenue / Selling Price ($)
Operating Expenses ($) (optional, for net margin)
Tax Rate (%) (optional)

Margin vs. Markup: Know the Difference

Margin is profit as a percentage of revenue (selling price). Markup is profit as a percentage of cost. They describe the same profit in different terms, and confusing them is one of the most common pricing mistakes.

MarginEquivalent Markup
20%25%
30%42.9%
40%66.7%
50%100%
60%150%

Industry Benchmark Margins

  • Retail — 25–50% gross margin
  • Restaurants — 60–70% gross margin on food
  • Professional services — 50–70% gross margin
  • SaaS / Software — 60–80% gross margin
  • E-commerce — 40–60% gross margin

Related Tools

Pricing CalculatorBreak-Even CalculatorROI CalculatorBusiness Budget Calculator

Frequently Asked Questions

What is the difference between margin and markup?

Margin is profit as a percentage of revenue. Markup is profit as a percentage of cost. Example: product costs $60, sells for $100. Margin = 40% ($40/$100). Markup = 66.7% ($40/$60). Margin is always the lower number.

What is a good profit margin?

It depends on your industry. Gross margins range from 25–50% for retail and 60–80% for software. Net margins after all expenses are typically 10–20% for healthy businesses. Compare your margin against industry benchmarks rather than using a universal target.

How do you calculate profit margin?

Gross Margin = ((Revenue − Cost) / Revenue) × 100. Net Margin = ((Revenue − Cost − Expenses − Taxes) / Revenue) × 100. This calculator computes both.