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Profit Margin Calculator (Margin vs Markup)

Find your profit margin and markup quickly, and learn the difference between them in plain words.

In short: profit margin shows how much of each sale you keep after paying for the item itself. Margin = (price − cost) ÷ price. Markup is different: it compares profit with the cost, not the price.

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.

Profit per item0
Profit margin0
Markup0
Monthly sales0
Monthly gross profit0

Margin = (price − cost) ÷ price. Markup = (price − cost) ÷ cost.

Margin vs Markup

MarginMarkup
Compares profit withThe selling priceThe cost
Formula(price − cost) ÷ price(price − cost) ÷ cost
Item costs 1.00, sells for 2.5060%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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