Calculate Your Profit Margin
Profit Margin Calculator
Enter what one item costs you and what you sell it for. Everything is calculated on this page — nothing is sent or saved.
Margin = (price − cost) ÷ price. Markup = (price − cost) ÷ cost.
Margin vs Markup
| Margin | Markup | |
|---|---|---|
| Compares profit with | The selling price | The cost |
| Formula | (price − cost) ÷ price | (price − cost) ÷ cost |
| Item costs 1.00, sells for 2.50 | 60% | 150% |
People mix these up often. A "50% markup" is only a 33% margin. Always say which one you mean.
Gross Margin vs Net Margin
- Gross margin counts only the cost of the items you sell. It is what this calculator shows.
- Net margin also subtracts rent, salaries, marketing, and all other costs. It shows what the whole business really keeps.
How to Improve Your Margin
- Lower your cost per item — better supplier deals, less waste.
- Raise prices carefully where customers see more value.
- Sell more of your higher-margin items, for example coffee with pastries.
Where It Fits in Your Business Plan
Your margin drives your break-even point and financial projections. To choose a price, see Pricing Your Product or Service.
Frequently Asked Questions
How do I calculate profit margin?
Subtract the cost from the selling price, then divide by the selling price. For example, (2.50 − 1.00) ÷ 2.50 = 60%.
What is a good profit margin?
It depends a lot on the industry and the business. Compare with similar businesses and make sure your margin covers all your monthly costs.
What is the difference between margin and markup?
Margin compares profit with the selling price. Markup compares profit with the cost.
Is this profit margin calculator free?
Yes. It is free, works in your browser, and does not send or save your numbers.
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