A profit margin calculator computes gross profit, profit margin percentage, and markup percentage from your cost and revenue figures.
About this calculator
A profit margin calculator computes gross profit, profit margin percentage, and markup percentage from your cost and revenue figures. These metrics drive business pricing decisions, profitability analysis, and financial planning.
Margin and markup are related but different: margin is calculated as a percentage of selling price, while markup is a percentage of cost. Understanding both prevents pricing errors.
Common uses
- Calculate profit margin on a product or service
- Determine selling price from cost using a target margin
- Analyse business profitability across product lines
- Compare margins before and after a price change
Frequently asked questions
What is the difference between profit margin and markup?
Profit margin = (Revenue − Cost) / Revenue × 100%. Markup = (Revenue − Cost) / Cost × 100%. For the same numbers, the markup percentage is always higher than the margin percentage. A 50% markup gives a 33.3% margin.
What is a good profit margin?
It varies widely by industry. Grocery stores operate on 2–3% net margins. Software companies achieve 20–30%+. Restaurants typically operate on 3–9% net margins. A healthy gross margin allows enough room to cover operating expenses and still remain profitable.