Calculator inputs
Enter the selling price and the cost amount to calculate gross profit and margin.
Enter the amount in the currency you are using. Keep the same currency across money fields.
Your base cost before calculating margin, markup or profit.
Controls rounding in the displayed result only; it does not change the underlying calculation.
Formula
margin % = (gross profit ÷ selling price) × 100
Example: Selling at $120 with a cost of $75 gives $45 gross profit and a 37.50% margin.
Worked examples
Selling price $100, cost $60 = $40 profit, 40.00% margin
Selling price $120, cost $75 = $45 profit, 37.50% margin
Selling price $250, cost $180 = $70 profit, 28.00% margin
When margin matters
Use margin when you want to measure profit as a percentage of selling price. It is a common metric for retail, ecommerce, and service pricing because it shows how much room is left after covering cost.
Margin calculator FAQ
What is profit margin?
Profit margin is gross profit divided by selling price, expressed as a percentage. It tells you how much of each sale remains after cost.
What is the difference between margin and markup?
Margin is based on selling price, while markup is based on cost. They are related but not interchangeable.
Which calculator should I use for setting a selling price?
If you know your cost and desired markup, use the Markup Calculator. If you already know selling price and want to measure profitability, use this tool.
Accuracy and use of results
CalculatorWorks aims to make calculations clear and practical. We use standard calculation methods where possible, explain assumptions in plain language, and encourage users to verify important results before relying on them.
Why profit margin matters
Profit margin shows how much of each sale remains after the direct cost of the item or service. It is one of the most useful numbers for comparing products, testing prices, and understanding whether revenue is actually turning into profit.
A higher margin gives a business more room to cover overhead, advertising, wages, software, rent, shipping losses, discounts, and unexpected costs. A low margin business may still be profitable, but it normally needs stronger sales volume and tighter cost control.
Example: If a product sells for $150 and costs $90, gross profit is $60 and margin is 40%. If the cost rises to $105 but price stays $150, margin falls to 30%.
Practical ways to use this calculator
- Compare two products to see which one contributes more profit per sale.
- Check whether a discount would push the sale below your target margin.
- Estimate how supplier price increases affect profitability.
- Review whether a service price covers labour, materials, and operating overhead.
For price setting, use this calculator with the markup and break-even calculators so you can compare selling price, profit per sale, and total sales volume needed.
More margin questions
Is margin the same as profit?
No. Profit is a currency amount. Margin is that profit expressed as a percentage of selling price.
Can margin be negative?
Yes. If cost is higher than selling price, the result is a loss and the margin becomes negative.
Should I calculate margin before or after tax?
Business margin is usually calculated on prices before tax, because sales tax and VAT are often collected for the government rather than kept as profit.
Why did my margin change if my price stayed the same?
Margin can fall when costs increase, even if the selling price does not change.