Profit Margin Calculator
Calculate gross profit, margin percentage, and markup.
This profit margin calculator (a profit and margin calculator) finds your gross profit dollar amount, profit margin percentage, and equivalent markup percentage from your revenue and cost figures.
Enter your revenue and cost, and the calculator returns profit, margin percentage, and markup percentage.
Worked Calculation Examples
| Scenario | Result | Calculation Step |
|---|---|---|
| $100 revenue, $60 cost | Profit $40, Margin 40% | Profit = 100 − 60 = $40. Margin = (40 ÷ 100) × 100 = 40%. |
| $250 revenue, $175 cost | Profit $75, Margin 30% | Profit = 250 − 175 = $75. Margin = (75 ÷ 250) × 100 = 30%. |
How to Calculate Profit Margin Percentage
Profit margin = (revenue - cost) / revenue x 100. A product sold for $100 that cost $60 to produce has a $40 profit and a margin of ($40/$100) x 100 = 40%.
Margin vs. Markup: A Common Point of Confusion
Margin is profit as a percentage of the selling price (revenue), while markup is profit as a percentage of the cost. The same $40 profit on a $60 cost item is a 40% margin but a 66.7% markup ($40/$60) - the two numbers are always different for the same transaction, which frequently confuses pricing decisions.
How to Use the Profit Margin Calculator
- Open the Profit Margin Calculator and enter the values requested in the input fields.
- Check the units, percentages, dates, or time periods before reading the answer.
- Review the instant result and adjust any value to compare another scenario.
- Use the formula, example, and FAQs below to understand how the profit margin calculator works.
Frequently Asked Questions
How do I calculate profit margin percentage?
Subtract cost from revenue to get profit, divide by revenue, then multiply by 100: margin = (revenue - cost) / revenue x 100.
What's the difference between profit margin and markup?
Margin divides profit by revenue (selling price); markup divides profit by cost. They produce different percentages for the same transaction - margin is always lower than markup for a profitable sale.
What is a good profit margin for a business?
It varies significantly by industry - retail often runs 20-50% margins, while some service and software businesses can exceed 80%, so comparing against industry-specific benchmarks matters more than a single universal target.
How do I use this profit margin calculator?
Enter the known values, review the units or settings, and the calculator updates the result instantly. The formula and example on this page show how the answer is produced.
What does the Profit Margin Calculator calculate?
Calculate gross profit, margin percentage, and markup. It is designed for fast browser-based calculations without sign-up, downloads, or manual spreadsheet setup.
What formula does this profit margin use?
The formula is: margin = (revenue - cost) / revenue * 100. Gross margin as a standardized financial metric developed alongside modern cost accounting practices in the early 20th century, as manufacturing businesses grew large and complex enough to need systematic ways to evaluate individual product profitability rather than judging the business's finances as a single undifferentiated whole.
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Last updated: September 27, 2026.