Margin Calculator

Calculate selling price from a target margin, or analyze markup and margin from a known price.

Calculation
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Margin to markup

The same profit is a lower margin than markup because margin is based on selling price.

Margin Markup
9.1%10%
16.7%20%
20.0%25%
25.0%33.3%
33.3%50%
50.0%100%

What is margin?

Profit margin is profit expressed as a percentage of selling price.

Margin = (Selling Price − Cost) ÷ Selling Price × 100

Cost $100 and selling price $125 is a 20% margin.

How to calculate selling price from margin

Selling Price = Cost ÷ (1 − Margin Rate)

$100 cost with 20% target margin: $100 ÷ 0.80 = $125. Adding 20% to cost would be a 20% markup, not a 20% margin.

Margin vs. markup

Margin and markup both describe profit, but they use different starting points. Margin compares profit with selling price. Markup compares profit with cost.

A product that costs $100 and sells for $125 has a 20% margin and a 25% markup. Use the Markup Calculator when you want to price from a markup percentage instead.

Gross margin vs. net margin

This calculator measures margin based on the cost and selling price entered. It is most similar to gross margin on an individual product or service. It does not calculate company-wide net profit margin after operating expenses, interest, and taxes. See Gross Profit vs Net Profit for that distinction.

Frequently asked questions

How do I calculate margin?
Margin = (Selling Price − Cost) ÷ Selling Price × 100. A $25 profit on a $125 selling price is a 20% margin.
How do I calculate selling price from margin?
Selling price = cost ÷ (1 − margin rate). A $100 cost with a 20% target margin is $100 ÷ 0.80 = $125. Do not add the margin percentage directly to cost.
What is the difference between markup and margin?
Markup is profit divided by cost. Margin is profit divided by selling price. A $100 cost and $125 selling price is a 25% markup and a 20% margin.
Why is 20% margin not the same as 20% markup?
On a $100 cost, a 20% markup produces a $120 selling price and a 16.7% margin. A 20% margin produces a $125 selling price and a 25% markup.
Is this gross margin or net margin?
This calculator measures margin from the cost and selling price you enter. It is most similar to gross margin on an individual product or service, not company-wide net profit margin.

Price from a markup percentage with the Markup Calculator. Put the selling price on an invoice with the Invoice Generator or check totals in the Invoice Calculator. For pricing a service, see How to Price Your Services or browse All Calculators.