Profit Margin Calculator

What Is Profit Margin?

Profit margin is the share of the selling price left after subtracting cost. It answers how much of each sales dollar is gross profit before costs not entered in the calculator.

How Do You Calculate Profit Margin?

Subtract cost from selling price, divide that profit by selling price, and multiply by 100. A zero selling price cannot produce a meaningful margin.

What Is the Difference Between Margin and Markup?

Margin compares profit with selling price; markup compares the same profit with cost. That different denominator is why a 50% markup is only a 33.33% margin.

Formula

• Profit = Selling price − Cost
• Margin = Profit ÷ Selling price × 100
• Markup = Profit ÷ Cost × 100

Example

A $60 cost and $100 selling price produces $40 profit, a 40% margin, and 66.67% markup.