Profit Margin Calculator (Margin, Markup & Price)
Margin, markup, and profit per unit, or work backward from the margin you want to the price you should charge.
Updated October 2026
| Margin | Markup | Price | Profit |
|---|---|---|---|
| 20% | 25% | $52.50 | $10.50 |
| 30% | 43% | $60.00 | $18.00 |
| 40% | 67% | $70.00 | $28.00 |
| 50% | 100% | $84.00 | $42.00 |
| 60% | 150% | $105.00 | $63.00 |
| 70% | 233% | $140.00 | $98.00 |
Profit margin formula
Gross profit margin = (Price − Cost) ÷ Price × 100. If a product costs you $42 and sells for $70, profit is $28 and margin is 28 ÷ 70 = 40%. Margin tells you what share of each sales dollar you keep after the direct cost of the product.
To find the price for a target margin, rearrange: Price = Cost ÷ (1 − Margin). For a 40% margin on a $42 cost: 42 ÷ 0.6 = $70. This is the calculation the *Price for a target margin* mode performs, and the table above lists it for common margins.
Margin vs. markup
These get confused constantly and the mistake is expensive. Markup is profit as a percentage of *cost*; margin is profit as a percentage of *price*. A 50% markup ($42 → $63) is only a 33% margin. A 100% markup (doubling the cost, the classic “keystone” retail pricing) is a 50% margin. If a supplier says “you'll make 40%” make sure you know which one they mean. The markup calculator converts between the two.
Gross vs. net margin
This calculator computes gross margin: revenue minus the direct cost of goods (materials, manufacturing, shipping-in, payment processing if you include it). Net margin subtracts everything else too: rent, salaries, marketing, software, taxes. Net margin is what determines whether the business is actually profitable; gross margin is what determines whether a product *can* be profitable. Use the break-even calculator to connect the two.
What is a good profit margin?
It depends heavily on the industry. Typical gross margins: grocery 20%–30%, restaurants 60%–70% (on food cost, before labor), retail apparel 45%–55%, e-commerce 30%–50%, SaaS software 70%–85%, consulting/services 50%–70%. Net margins are far thinner: 2%–5% for grocery and restaurants, 5%–10% for most retail, 15%–25% for mature software. If your gross margin is below your industry's typical range, the price is too low or the cost is too high, and no amount of volume fixes that.
Frequently asked questions
How do I calculate profit margin percentage?+
Subtract cost from price to get profit, divide by price, and multiply by 100. Enter both numbers above and the margin, markup, and per-unit profit appear instantly.
What price gives me a 50% margin?+
Double the cost. Price = Cost ÷ (1 − 0.5) = 2 × Cost. For other targets, use the 'Price for a target margin' mode.
Should I include shipping and fees in cost?+
Yes, for an honest margin include every cost that scales per unit: materials, packaging, inbound shipping, marketplace fees, and payment processing. Fixed costs like rent belong in the break-even analysis instead.
Can margin be over 100%?+
No. Since margin is profit divided by price and profit can't exceed price, margin maxes out just under 100% (when cost is near zero). Markup, however, can be any number: 200%, 500%, and so on.