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Profit margin calculator

Calculate the profit margin of a product or service from its cost and sale price.

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Margin

20%

This calculator is for informational purposes only and does not constitute financial advice.

Calculates margin as (price - cost) / price x 100, i.e. what percentage of the sale price is profit.

Use cases

  • Setting prices that guarantee a target margin.
  • Comparing the profitability of different products.
  • Analyzing the financial health of a business line.

How it works

  1. 1

    Enter the cost

    Type the production or acquisition cost.

  2. 2

    Enter the sale price

    Type the price it's sold for.

Technical details

  • Example: if you buy at $60 and sell at $100, margin is (100 − 60) / 100 = 40%. The markup on cost for the same sale would be 66.67%.
  • Margin never reaches 100% as long as cost is above zero, and it's negative if you sell below cost.
  • If the sale price is 0, margin is undefined and the calculator shows "-". Result rounded to 2 decimal places. You can type decimals with a comma or a dot (12.5 or 12,5).
  • Enter price and cost both with or both without sales tax: mixing one with tax and one without distorts the margin.

Frequently asked questions

How is it different from markup?

Margin is calculated on the sale price; markup is calculated on the cost. For the same product, margin is always lower than markup.

What price do I need for a 30% margin?

Divide cost by (1 − 0.30). With a $70 cost, the price is 70 / 0.70 = $100. Adding 30% to the cost ($91) would only give a 23% margin.

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