Margin & Markup Calculator
Calculate profit margin, markup percentage, and revenue for your products or services.
Results are estimates for informational purposes only and do not constitute financial, legal, or medical advice.
Use our margin and markup calculator to analyze the profitability of your products. In "Calculate from prices" mode, enter the cost and selling price to instantly get the gross profit margin and markup percentage. In "Find selling price" mode, enter your cost and target margin or markup — and get the exact price you need to charge.
Margin and markup are the two most important pricing metrics in business. Understanding the difference — and knowing which one your industry uses — is essential for setting correct prices, negotiating with suppliers, and benchmarking against competitors.
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit as a percentage of revenue: Margin = (Profit ÷ Revenue) × 100. Markup is profit as a percentage of cost: Markup = (Profit ÷ Cost) × 100. For the same product, markup is always higher than margin. Example: cost $100, sell $150 → profit $50 → Markup 50%, Margin 33.3%.
Which is more useful — margin or markup?
Margin is preferred in financial analysis, P&L reporting, and accounting because it shows what percentage of revenue is profit. Markup is more common in retail and procurement when calculating the selling price from cost. Most financial software defaults to margin.
How do I calculate selling price from a target margin?
Selling Price = Cost ÷ (1 − Margin%). Example: cost $100, target margin 30% → $100 ÷ 0.70 = $142.86. This is what the "Find selling price" mode does automatically.
What is a good profit margin?
It varies by industry. Grocery retail: 2–5%. Food service: 3–9%. Manufacturing: 10–20%. Ecommerce: 15–30%. Software/SaaS: 60–80%. Consulting: 30–50%. Always benchmark against your specific industry and ensure your gross margin covers fixed costs plus net profit target.
What is the formula for markup from margin?
Markup = Margin ÷ (1 − Margin). Example: 30% margin → 30% ÷ 70% = 42.86% markup. Conversely: Margin = Markup ÷ (1 + Markup). Example: 42.86% markup → 42.86% ÷ 142.86% = 30% margin.
What is gross margin vs net margin?
Gross margin = (Revenue − Cost of Goods Sold) ÷ Revenue. Net margin = Net Profit ÷ Revenue (after all expenses including overheads, taxes, interest). This calculator computes gross margin. Net margin requires subtracting all operating and fixed costs.
What is a retail markup percentage?
Common retail markup percentages by category: clothing 100–200%; electronics 10–30%; furniture 200–400%; jewelry 300–500%; grocery 10–20%; hardware 30–50%. These are typical ranges — individual products vary widely based on brand, exclusivity, and competition.
What is the keystone markup?
Keystone markup is doubling the cost price to set the selling price — a 100% markup (50% margin). It was the traditional retail rule of thumb. Modern retailers often use higher markups for premium products and lower for commodities.
How does VAT/sales tax affect margin calculation?
Margin should be calculated on prices excluding VAT, because VAT is collected on behalf of the government and is not your revenue. If your selling price includes VAT, remove it first: Price ex-VAT = Price incl. VAT ÷ (1 + VAT rate). Then calculate margin on the ex-VAT prices.
What is contribution margin?
Contribution margin = Revenue − Variable Costs. It shows how much each sale contributes to covering fixed costs and generating profit. It differs from gross margin in that it only subtracts variable (not all direct) costs. Contribution margin is particularly useful for break-even analysis and pricing decisions.