Results are estimates, not financial or tax advice. Tax rates change; check the rate that applies to you with your tax office.
This profit margin calculator turns a cost and a selling price into gross margin, markup and profit, or works backward to the price you should charge for a target margin or markup. It keeps the two ideas apart, because a 50% markup is only a 33.3% margin and mixing them up is a common pricing mistake.
How to use
- Pick a tab: Percentage, Discount, Margin or VAT / tax. Each also has its own page.
- In Percentage, choose the calculation (% of, What %, % change, Add / subtract, Reverse) and type two numbers. The answer updates as you type.
- In Discount, enter the price and tap a percentage. Add an extra % off or a coupon to stack discounts.
- In Margin, enter cost and selling price, or switch to Target margin or Markup to get the price you should charge.
- In VAT / tax, choose Add tax or Remove tax, enter the amount and tap a rate or type your own. Tap any result to copy it.
- Percentage change = (new − old) ÷ |old| × 100. Percentage difference compares two values to their average, so it’s the same in both directions.
- Reverse percentage divides by (1 + p/100): a price of 115 after a 15% increase was 100, not 97.75.
- Stacked discounts multiply: 20% off and then an extra 10% off is 28% off in total, not 30%.
- Margin is profit ÷ selling price; markup is profit ÷ cost. A 50% markup gives a 33.3% margin.
- Tax rates change and can differ by product and region (US sales tax adds city and county rates). The chips are common examples; check the rate that applies to you.
- Type decimals with a dot or a comma.
Margin and markup
Profit = price − cost. Gross margin = profit ÷ price × 100, the share of each sale you keep. Markup = profit ÷ cost × 100, how much you add on top of cost. With a cost of 60 and a price of 100, profit is 40, the margin 40% and the markup 66.7%.
Margin can never reach 100%, while markup has no upper limit: selling at three times cost is a 200% markup but a 66.7% margin.
Pricing for a target
For a target margin, price = cost ÷ (1 − margin). A 40% margin on a cost of 30 needs a price of 50, not 42, which is what adding 40% to cost would give. For a target markup, price = cost × (1 + markup). Remember that gross margin ignores overheads such as rent, wages, fees and shipping.
Frequently asked questions
How do I calculate profit margin?
Divide profit by the selling price and multiply by 100. A product that costs 70 and sells for 100 has a 30% margin.
What is the difference between margin and markup?
Margin divides profit by price; markup divides profit by cost. The same sale of cost 60, price 100 is a 40% margin and a 66.7% markup.
How do I set a price for a 30% margin?
Divide cost by 0.7. A cost of 35 gives a price of 50, with a profit of 15.
What markup gives a 50% margin?
A 100% markup: doubling the cost means half of the price is profit.
Does the margin include VAT or sales tax?
No. Calculate margin on net prices without tax, because the tax goes to the government, not into your profit.