Margin Calculator
Find profit margin and markup, or the price needed for a target margin.
Gross margin
-Margin and markup formulas
- Profit = selling price − cost
- Gross margin = profit ÷ selling price × 100
- Markup = profit ÷ cost × 100
- Price from a target margin = cost ÷ (1 − margin ÷ 100)
- Price from a markup = cost × (1 + markup ÷ 100)
Worked examples
- Cost $60, price $100: profit $40, margin 40%, markup 66.67%.
- Cost $60, target margin 30%: price $60 ÷ 0.70 = $85.71, profit $25.71, markup 42.86%.
- Cost $60, markup 50%: price $90, profit $30, margin 33.33%.
Margin and markup side by side
| Gross margin | Markup needed |
|---|---|
| 20% | 25% |
| 25% | 33.33% |
| 30% | 42.86% |
| 40% | 66.67% |
| 50% | 100% |
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price. Markup is profit as a share of the cost. The same sale has a higher markup than margin, so a 50% markup is only a 33.33% margin.
Can gross margin be more than 100%?
No. Profit cannot be larger than the selling price, so margin stays below 100%. Markup can be above 100% when the price is more than double the cost.
Is this gross margin or net margin?
Gross margin. It only subtracts the cost of the item. Net margin also subtracts expenses such as rent, wages and taxes.
How do I price a product for a target margin?
Choose the margin option, enter your cost and the margin you want, and the calculator shows the price. For example, a $60 cost and 30% margin gives $85.71.
Results are estimates for general information, not financial advice.