Profit Margin Calculator
Profit margin is how much of each sale you actually keep, expressed as a percentage of revenue. This calculator takes your selling price and your cost and returns the profit per unit, the margin, and the markup that the same numbers represent. It works in any currency.
- Cost
- Profit
- Profit
- $50.00
- Profit margin
- 33.33%
- Markup
- 50.00%
- Revenue
- $150.00
You keep 33.3 cents of every unit of revenue as profit. That margin is the same deal as a 50.0% markup on your cost.
How it works
Margin answers the question every business owner cares about: of the money that comes in, how much stays? You subtract the cost from the revenue to get the profit, then divide that profit by the revenue. If you sell something for 150 that cost you 100, your profit is 50 and your margin is 50 ÷ 150, or about 33.3%.
Margin is the figure investors, accountants, and lenders look at, because it is comparable across products and prices — it is always a slice of revenue. Markup, by contrast, is what you add on top of cost to set the price in the first place. The same 50 of profit on a 100 cost is a 50% markup but only a 33.3% margin. Quoting margin makes a deal sound leaner; quoting markup makes it sound fatter. They describe the identical transaction.
Switch the currency at the top to read the profit in your own — the margin and markup percentages do not change.
Profit = Revenue − Cost. Profit margin = Profit ÷ Revenue × 100. Markup = Profit ÷ Cost × 100. Margin is measured against the selling price; markup against the cost.
Worked example
Sell an item for 150 that costs you 100. The profit is 150 − 100 = 50. The margin is 50 ÷ 150 = 33.3% of revenue. The markup is 50 ÷ 100 = 50% on cost. So a 33.3% margin and a 50% markup are the same 50 of profit, just measured against two different bases.
Things to watch out for
If cost exceeds revenue the margin is negative — you are selling at a loss. A margin can approach but never reach 100%, because that would mean zero cost. Be clear which margin you mean: this is gross margin on a single product. Net (or operating) margin also subtracts overheads, salaries, and tax, so it is always lower than the gross margin shown here.
Frequently asked questions
Is margin the same as markup?+
No. Margin is profit as a percentage of the selling price; markup is profit as a percentage of cost. For the same sale, markup is always the larger number — a 50% markup is a 33.3% margin.
What counts as a good profit margin?+
It depends entirely on the industry. Grocery retail runs on single-digit margins, while software can exceed 80%. Compare yourself to peers in your sector, not to a universal benchmark.
Is this gross or net margin?+
This is gross margin — revenue minus the direct cost of the item. Net margin also subtracts overheads, wages, and tax, so your true bottom-line margin will be lower.
Can I use this for any currency?+
Yes. Margin and markup are percentages, so the result holds in any currency. Use the switcher at the top to display the profit figure in yours.
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Disclaimer: This calculator is for educational and informational purposes only and provides estimates, not financial advice. Interest rates, taxes, fees, and local rules vary and change over time. Confirm figures with a qualified professional before making any financial decision.
Last reviewed: 2026-06-22