Profit Margin Calculator
Enter what a product costs you and what you sell it for to see your gross profit margin, the equivalent markup, and the profit you keep on every sale.
Cost and revenue
What the product or service costs you, greater than $0.
The selling price or revenue, up to $1 billion.
You keep $40.00 of gross profit on every $100.00 of revenue.
- Gross profit
- $40.00
- Markup
- 66.67%
- Cost
- $60.00
- Revenue
- $100.00
How profit margin is calculated
Gross profit is revenue minus cost. Gross margin expresses that profit as a share of revenue, while markup expresses the same profit as a share of cost. Margin answers “how much of each sale do I keep?” and markup answers “how much did I add on top of cost?” — two views of the same gross profit.
Gross margin % = ((Revenue − Cost) / Revenue) × 100Markup % = ((Revenue − Cost) / Cost) × 100- Cost
- What the item costs you
- Revenue
- Selling price or revenue
$60 cost, $100 revenue
Suppose an item costs you $60 and you sell it for $100. Gross profit is $100 − $60 = $40. Gross margin is $40 / $100 = 40%. The same $40 profit against the $60 cost is a markup of $40 / $60 = 66.6667%. So a 40% margin and a roughly 66.67% markup describe the identical sale.
This is an educational calculation based only on the values you provide. It is not accounting or tax advice.
What this calculator assumes
- Cost is your total cost of goods for the unit, before overhead that is not tied to the item.
- Revenue is the price actually received, after any discounts you grant.
- No taxes, such as sales tax or income tax, are modeled.
- Money values are rounded to the nearest cent for display.
Profit margin FAQ
What’s the difference between margin and markup?
Margin is profit as a percentage of the selling price, while markup is the same profit as a percentage of cost. Because the denominators differ, markup is always the larger number for a profitable sale — a 40% margin equals a 66.67% markup.
Is a higher margin always better?
Not always. A higher margin per unit can come with lower sales volume, and it ignores fixed costs and overhead. Use margin alongside a break-even analysis and your total cost picture before setting prices.
Sources and review notes
- U.S. Small Business Administration — pricing and financial management guidance
- Government of Canada — business pricing and profit guidance
Methodology last checked Jul 14, 2026. Formula implementation is covered by deterministic unit tests. No financial professional review is claimed yet.