Profit margin calculator
Margin, markup and the price needed to hit a target margin.
How it works
Works out gross profit, margin and markup from cost and price, and reverses it to give the price needed for a target margin.
Margin and markup are the confusion that costs real money. Margin is profit as a share of the selling price; markup is profit as a share of the cost. A 50% markup is a 33.3% margin, and a 50% margin needs a 100% markup. Pricing to a margin target using a markup formula undercharges every time, and the gap widens as the target rises.
The formula that matters: to hit a target margin, price = cost ÷ (1 − margin). To apply a markup, price = cost × (1 + markup).
This tool runs entirely in your browser. Nothing you enter is sent to a server, logged or stored, and the page keeps working with the network disconnected.
Common questions
- What is the difference between margin and markup?
- Margin is profit divided by the selling price; markup is profit divided by the cost. A 50% markup is only a 33.3% margin.
- How do I price for a 40% margin?
- Divide the cost by 0.6. A $60 cost needs a $100 price, which is a 66.7% markup rather than 40%.
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Sources
- Calculated on this page — At One Place