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