Budgeting & Income
Profit Margin Calculator
Margin and markup measure the same profit from two angles, and confusing them mis-prices products. Enter your cost and sale price to see the profit, the margin (profit as a share of the price), and the markup (profit as a share of cost).
Formula shown below · Tested against worked examplesHow we verify
Profit margin: 60%
Profit margin
60%
Share of the sale price you keep as profit.
- Profit per unit
- $150
- Markup
- 150%
- Cost
- $100
Profit as a share of your cost.
Compare scenariosTry three values of one input
| Sale price (revenue) | |||
|---|---|---|---|
| Profit margin | 55.56% | 60%+4.44% | 63.64%+8.08% |
| Profit per unit | $125 | $150+$25 | $175+$50 |
| Markup | 125% | 150%+25% | 175%+50% |
Every other input stays at the value you set above — currently $250 for sale price (revenue). Differences are measured against the first column.
Saved scenariosSave this calculation
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How this calculator works
Profit = revenue − cost. Margin = profit ÷ revenue; markup = profit ÷ cost. When revenue or cost is zero the corresponding ratio is reported as zero rather than undefined.
This is gross margin on one unit — it reflects direct cost only. Net (bottom-line) margin also subtracts overhead, taxes, and other operating costs, so it's always lower than the gross margin shown here.
Formula
Profit = Revenue − Cost
Margin = Profit ÷ Revenue
Markup = Profit ÷ Cost- Revenue
- Sale price
- Cost
- Cost of goods, or full cost — the two give very different margins
Margin and markup are not the same and are constantly confused: a 50% markup is a 33% margin. Margin divides by revenue, markup by cost.
What this assumes
- The cost figure you enter. Gross margin uses cost of goods only; net margin includes overheads, and they can differ by tens of points.
- No tax applied — this is a margin, not a take-home figure.
- One-off costs are treated as recurring if entered, which distorts a single period.
What changes this number
- Which margin you mean
- Gross, operating and net answer different questions and are routinely confused in pricing conversations.
- Cost of goods
- A small change moves the margin more than the same change in price on low-margin products.
- Price
- Raising it improves margin faster than cutting cost, which is why pricing is the strongest lever most businesses have.
A worked example
Take the $100 cost, $250 price scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.
What you enter
- Sale price (revenue)
- $250
- Cost
- $100
What it returns
- Profit margin
- 60%
- Profit per unit
- $150
- Markup
- 150%
- Cost
- $100
Sources
This calculator uses no external data — the result follows entirely from the formula above and the values you enter, so there is nothing to cite beyond the arithmetic.
Calculator last reviewed August 9, 2026. How we verify
Try an example
Frequently asked questions
What's the difference between margin and markup?
They measure the same profit against different bases. Margin is profit as a percent of the sale price; markup is profit as a percent of the cost. A product costing $100 sold for $250 has a $150 profit — a 60% margin (150 ÷ 250) but a 150% markup (150 ÷ 100). Margin is always the smaller number.
How do I calculate profit margin?
Subtract cost from the sale price to get profit, then divide by the sale price and multiply by 100. Profit of $150 on a $250 sale is 150 ÷ 250 = 60% margin. This is gross margin — it covers the direct cost of the item, before overhead like rent, marketing, and salaries.
What is a good profit margin?
It varies widely by industry — grocery stores run on single-digit margins while software can exceed 80%. For many small product businesses, a gross margin of 40–60% is healthy because overhead and taxes still come out of it. Compare against your own category, not a universal target.
How do I set a price for a target margin?
Divide your cost by (1 minus the target margin). To hit a 60% margin on a $100 cost: $100 ÷ (1 − 0.60) = $250. Note you divide by one-minus-the-margin, not multiply by the markup — mixing the two is the most common pricing mistake.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.