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CalcuMetro

Profit Margin Calculator

Calculate profit margin

Calculate a product or service's profit and margin from its selling price and cost, along with its markup. Useful for setting prices and reviewing a business's profitability.

Calculate your profit margin

Result

Profit margin

40%

Profit per unit
€20.00
Markup
66.67%

Formula version: 1.0.0

How to use the profit margin calculator

  1. Enter the selling price (excluding tax).
  2. Enter the cost of the product or service.
  3. Review the profit, margin and markup.

Profit margin formula

Margin = (price − cost) / price × 100 · Markup = (price − cost) / cost × 100

Margin is measured against price and markup against cost; that's why markup is always higher.

Profit margin example

If you sell for €50 something that costs you €30, you make €20: a 40% margin and a 66.67% markup.

Illustrative example with the data shown; not a guaranteed outcome.

Assumptions and limitations

  • Price and cost excluding indirect taxes.
  • Gross margin: overheads are not deducted.

Frequently asked questions

What's the difference between margin and markup?

Margin measures profit relative to the selling price; markup, relative to cost.

What's a good margin?

It depends on the sector: a supermarket and a software company have very different margins.

Related calculators

See basic finance calculators

Indicative result for information only; not financial or tax advice. Read the legal notice · How we calculate results

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