Profit Margin vs Markup Calculator
Enter your unit cost and selling price to instantly see your profit, profit margin, and markup side by side — or work backwards from a target margin or markup to find the price you need to charge.
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| Price for target margin | — |
|---|---|
| Price for target markup | — |
Margin is profit as a share of selling price; markup is profit as a share of cost.
How to use this calculator
Type your unit cost — what the item costs you to make or buy — and your selling price. The calculator instantly shows your profit in dollars, your profit margin (profit ÷ price), and your markup (profit ÷ cost), along with a stacked bar visual showing the cost and profit portions of each sale.
To work backwards, enter a target margin or target markup. The calculator then tells you exactly what price to charge to hit that target on your given cost — no algebra required.
How it works
The forward math is simple: profit = selling price − cost, margin = profit ÷ selling price × 100, and markup = profit ÷ cost × 100. Because markup divides by the smaller number (cost), it is always larger than margin for the same sale — the gap grows as your profit grows.
The reverse math solves for price. Since margin = (price − cost) ÷ price, rearranging gives price = cost ÷ (1 − margin). For markup, since price = cost × (1 + markup) directly, a 100% markup simply doubles your cost. This calculator assumes a single unit with no taxes, fees, or discounts — treat results as a starting point and add your other costs before setting a final price.
Frequently asked questions
What's the difference between profit margin and markup?
Profit margin is profit as a percentage of the selling price (profit ÷ price × 100), so it shows what share of revenue you keep. Markup is profit as a percentage of the cost (profit ÷ cost × 100), so it shows how much you add on top of cost. They answer different questions: margin looks down at price, markup looks up from cost.
What's the formula for profit margin?
Profit margin = (selling price − cost) ÷ selling price × 100. For example, a $60 cost and a $100 price give a $40 profit and a 40% margin (40 ÷ 100 × 100). Markup uses the same profit but divides by cost: 40 ÷ 60 × 100 = 66.67%.
Can profit margin be over 100%?
No. Since profit margin is measured against the selling price, it is mathematically capped at 100% (when the item costs nothing). Markup, on the other hand, can exceed 100% — for instance, doubling your cost is a 100% markup but only a 50% margin. A target margin must be below 100%.
Should I price with margin or markup?
Use margin when you want revenue targets — for example, "I want to keep 30% of every sale." Use markup when you build price from cost — for example, "I'll charge cost plus 50%." If you add 30% to cost thinking it's a 30% margin, you'll actually earn a 23.08% margin, so this calculator converts between the two.
Why is markup always higher than margin for the same numbers?
Because markup divides the same profit by the smaller number (cost), while margin divides it by the larger number (selling price). With a $60 cost and $100 price, the $40 profit is 40 ÷ 60 = 66.67% of cost but only 40 ÷ 100 = 40% of price. The gap widens as profit grows.