Margin CalculatorFree online financial calculator — instant results, no sign-up
Profit margin and markup from cost and price.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Margin Calculator
This calculator determines the gross profit, profit margin percentage, and markup percentage from an item's direct cost and selling price. It is commonly used by retail managers, wholesalers, and small business owners to evaluate pricing strategies and profitability.
- Cost
- The purchase or production cost of the item in dollars. Typically a non-negative number greater than zero.
- Revenue / price
- The selling price or total revenue generated per unit in dollars. Must be greater than zero to calculate margin.
Formula and method
Gross Profit = Revenue − Cost Margin (%) = ((Revenue − Cost) / Revenue) × 100 Markup (%) = ((Revenue − Cost) / Cost) × 100
- CostDirect unit cost to acquire or manufacture the product (c)
- RevenueSelling price charged to the customer per unit (p)
- Gross ProfitAbsolute dollar amount earned after subtracting direct unit cost
- MarginGross profit expressed as a percentage of total revenue
- MarkupGross profit expressed as a percentage of the original cost
The tool subtracts cost from revenue to determine total gross profit in dollars. It then divides that profit by the revenue to compute the margin percentage, and divides the same profit by the cost to compute the markup percentage.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Cost60 $
- Revenue / price100 $
Results
- Gross profit$40.00
- Margin40%
- Markup66.67%
How to use the Margin Calculator
- 1Enter the product unit cost in the Cost field.
- 2Enter the unit selling price in the Revenue / price field.
- 3Subtract Cost from Revenue to yield the dollar Gross profit.
- 4Divide Gross profit by Revenue to display Margin, and by Cost to display Markup.
Reading your result
Margin represents the portion of every dollar of sales that you keep as profit before operating expenses. Markup shows the percentage added on top of your baseline cost to reach your final selling price. Because margin divides by revenue and markup divides by cost, markup will always be higher than margin for profitable transactions.
Limitations
This calculation only considers direct cost of goods sold and does not factor in operating expenses, taxes, shipping, or sales commissions. It assumes unit revenue and cost are constant and positive; setting cost or revenue to zero will cause division-by-zero or non-meaningful percentages.
Common questions
What is the difference between margin and markup?+
Margin is calculated as profit divided by the selling price, showing what share of revenue is profit. Markup is calculated as profit divided by the cost, showing how much the price was raised above cost.
Can profit margin ever exceed 100%?+
No, gross profit margin cannot exceed 100% because revenue is the denominator and profit cannot exceed total revenue unless cost is negative. Markup, however, can easily exceed 100% if the selling price is more than double the cost.
Why does a 50% markup equal a 33.33% margin?+
If an item costs $60 and is marked up 50% ($30), the price becomes $90. The profit of $30 divided by the $90 price yields a 33.33% margin.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
Further reading
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Results are estimates for informational purposes and are not financial, medical or legal advice.