Enter your cost and revenue (or any two of cost, revenue, profit, or markup) into the Margin Calculator and get back your profit margin %, markup %, gross profit, and revenue — all calculated together. Adjust any two fields and the rest update automatically, giving you a full picture of your pricing and profitability.
Profit Margin
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Markup
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Gross Profit
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Revenue
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Cost
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Profit margin is the percentage of revenue that remains as profit after deducting costs. The formula is: Margin % = (Profit / Revenue) × 100, where Profit = Revenue − Cost. For example, if you sell an item for $50 and it cost $30, your profit is $20 and your margin is 40%.
Margin is profit expressed as a percentage of revenue (selling price), while markup is profit expressed as a percentage of cost. A 40% margin does not equal a 40% markup — the same profit translates to a higher markup percentage than margin percentage. Use margin when analyzing profitability and markup when setting prices above cost.
Gross profit margin only accounts for the cost of goods sold (COGS) subtracted from revenue. Net profit margin also deducts operating expenses, taxes, interest, and other overheads. This calculator focuses on gross profit margin, which is the most commonly used figure for pricing decisions.
To achieve a 20% profit margin, use the formula: Revenue = Cost / (1 − 0.20). For instance, if your cost is $80, your required selling price is $80 / 0.80 = $100. You can also enter your cost and set the Margin % field to 20% in this calculator and it will compute the revenue for you.
A 'good' margin varies significantly by industry. Retail businesses often see margins of 2–10%, while software companies can achieve 60–80%. As a general benchmark, a net profit margin above 10% is considered healthy for most businesses. Focus on trends in your own margins over time rather than comparing across industries.
In theory, a higher margin is better, but extremely high margins can attract competition, signal overpricing, or indicate underinvestment in growth and quality. In competitive markets, setting prices too high can reduce sales volume enough to hurt total profit even if per-unit margin is large.
No. Profit is an absolute dollar amount (Revenue − Cost), while margin is that profit expressed as a percentage of revenue. Two products can have the same profit in dollars but very different margins if their revenues differ.
In Excel, enter your cost in cell A1 and revenue in B1. In C1, type the formula =(B1-A1)/B1 and format the cell as a percentage. This gives you the gross profit margin. For markup, use =(B1-A1)/A1 instead.