Profit Margin Calculator
The Profit Margin Calculator computes both your profit margin (profit as a percent of revenue) and markup (profit as a percent of cost) — two related but different numbers business owners often confuse.
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How This Tool Works
Enter your total revenue and total cost to instantly see your profit, profit margin, and markup percentage.
Formula & Method
Profit = revenue − cost. Margin (%) = profit ÷ revenue × 100. Markup (%) = profit ÷ cost × 100.
Example Calculation
A product sold for $100 that costs $60 to produce has a $40 profit — a 40% profit margin, but a 66.7% markup.
Frequently Asked Questions
What's the difference between margin and markup?+
Margin is profit as a percent of the selling price (revenue), while markup is profit as a percent of your cost. They're calculated from the same numbers but always give different percentages.
What is a good profit margin?+
It varies widely by industry — retail often runs 20–50%, while software and services can run much higher. Compare against industry benchmarks for context.
Should I price based on margin or markup?+
Many businesses set prices using markup (cost + a percentage) but then track performance using margin, since margin better reflects overall profitability against revenue.
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