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Profit Margin & Markup Calculator

Calculate gross profit margin and markup percentage from cost and selling price. Instantly convert between margin and markup.

Profit Margin & Markup Calculator

From Cost + Price → Margin & Markup

Gross Profit

Profit Margin

Markup %

Markup ×

From Cost + Target Margin → Selling Price

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Profit Margin vs Markup: The Critical Difference

Margin and markup both describe profitability, but they use different bases for calculation. Confusing them is one of the most common pricing mistakes in business — you can easily underprice products and lose money if you mix them up.

Formulas

  • Gross Profit Margin = (Selling Price − Cost) / Selling Price × 100 — profit as % of revenue
  • Markup = (Selling Price − Cost) / Cost × 100 — profit as % of cost

Example: Item costs $60, sells for $100. Gross profit = $40. Margin = 40/100 = 40%. Markup = 40/60 = 66.7%. Same product, two different numbers — always clarify which you mean.

What is a Good Profit Margin?

  • Retail: 20–50% gross margin
  • SaaS: 60–80%+ gross margin
  • Restaurants: 60–70% gross, 3–9% net
  • E-commerce: 30–50% gross
  • Manufacturing: 10–40% gross

Net vs Gross Margin

Gross margin only subtracts the direct cost of goods (COGS). Net margin also subtracts operating expenses, taxes, and interest. A business with 60% gross margin and 5% net margin has substantial overhead. Both metrics are needed for a complete picture.

Frequently Asked Questions