What is the difference between margin and markup?

Margin is profit divided by the selling price, while markup is profit divided by the cost. A cost of 60 sold for 100 gives a 40% margin but a 66.67% markup.

How is profit margin calculated?

Profit margin = (selling price − cost) ÷ selling price × 100. For a cost of 60 and price of 100, the margin is (100 − 60) ÷ 100 = 40%.

How is markup calculated?

Markup = (selling price − cost) ÷ cost × 100. For a cost of 60 and price of 100, markup is 40 ÷ 60 = 66.67% — the percentage you added on top of the cost.

What is gross profit?

Gross profit is simply selling price minus cost — the cash profit on the sale before overheads. A 100 price on a 60 cost gives 40 gross profit.

Why is markup always larger than margin?

Markup divides profit by the smaller number (cost), while margin divides by the larger number (price). Same profit over a smaller base gives a bigger percentage, so markup exceeds margin.

How do I set a price for a target margin?

Divide the cost by (1 − target margin). For a 40% margin on a 60 cost, price = 60 ÷ (1 − 0.40) = 60 ÷ 0.60 = 100.

Does this tool store my figures?

No — all calculations happen locally in your browser and nothing is sent anywhere.

Profit Margin Calculator

Profit margin calculator

Enter your cost and selling price to instantly see your gross profit, profit margin and markup. Margin and markup are easy to confuse but mean different things — getting them right matters for pricing, quoting and profit planning.

How it works

From the cost and selling price, the tool computes three figures:

gross profit = price − cost
margin %     = profit ÷ price × 100    (profit as a share of the selling price)
markup %     = profit ÷ cost  × 100    (profit as a share of the cost)

Margin can never exceed 100%, but markup can, because the cost base is smaller than the price. For the same sale, markup is always the larger percentage.

Example

Cost 60, selling price 100:

Gross profit: 100 − 60 = 40
Margin: 40 ÷ 100 = 40%
Markup: 40 ÷ 60 = 66.67%

Cost	Price	Profit	Margin	Markup
60	100	40	40%	66.67%
80	100	20	20%	25%
50	150	100	66.67%	200%

All figures stay in your browser.