Free Profit Margin Calculator — Margin, Markup & Pricing
Know your numbers. Our free profit margin calculator instantly computes your profit margin, markup percentage, and net profit from cost and revenue figures. Enter cost and revenue and you get the profit on every sale, in the units your accountant and your marketplace each expect.
The margin-to-markup converter clears up one of the most common business math confusions — because 50% markup is NOT 50% margin. Compare gross, operating, and net margins to understand your business profitability at every level. No signup, no data collection.
How to use Profit Margin Calculator
- Enter cost and revenue — Type your product cost (COGS) and selling price/revenue. For a product that costs $30 to make and sells for $50, enter Cost=$30, Revenue=$50.
- See instant margin and markup — The calculator shows: Profit=$20, Margin=40%, Markup=66.7%. Toggle between margin and markup modes to understand both perspectives.
- Use the converter — Enter a markup percentage to see the equivalent margin (and vice versa). This is critical for pricing: a 100% markup sounds aggressive but equals only a 50% margin.
- Analyze break-even — Enter your fixed monthly costs (rent, salaries, etc.) to see how much revenue you need at your current margin to break even. At 40% margin with $10,000 fixed costs, you need $25,000 revenue.
Features
- Margin Calculator — Enter cost and revenue to see profit, margin %, and markup % instantly.
- Markup Calculator — Enter cost and markup % to calculate selling price and equivalent margin.
- Margin ↔ Markup Converter — Convert between margin and markup percentages. 50% markup = 33.3% margin, 100% markup = 50% margin.
- Break-Even Analysis — Enter fixed costs to calculate how much revenue you need at your current margin to break even.
- Industry Reference — Average profit margins by industry sector for benchmarking your business.
- Quick Reference Table — Common markup-to-margin conversions at a glance.
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit as a percentage of selling price: ($50 - $30) / $50 = 40%. Markup is profit as a percentage of cost: ($50 - $30) / $30 = 66.7%. Same $20 profit, different denominators. Key rule: margin is always lower than markup for the same transaction. A 50% markup = 33.3% margin. Confusing these is the #1 pricing mistake in small business.
What is a good profit margin?
It varies dramatically by industry. Average net profit margins: Software/SaaS: 20-30%, Retail/ecommerce: 3-10%, Restaurants: 3-9%, Manufacturing: 5-12%, Professional services: 15-25%, Grocery stores: 1-3%. A "good" margin beats your industry average.
How do I calculate margin from markup?
Formula: Margin = Markup / (1 + Markup). Example: 60% markup → 0.60 / 1.60 = 0.375 = 37.5% margin. Reverse: Markup = Margin / (1 - Margin). Quick reference: 25% markup = 20% margin, 50% markup = 33.3% margin, 100% markup = 50% margin.
How do I set prices using margin targets?
Selling Price = Cost / (1 - Target Margin). If your cost is $30 and you want 40% margin: $30 / (1 - 0.40) = $30 / 0.60 = $50 selling price. Always price using margin (not markup) to ensure your profit targets are met correctly.