Profit Margin Calculator (Calculate Profit & Markup Instantly)
Our free profit margin calculator helps you determine selling prices, profit, margin, and markup to ensure your business is profitable. Perfect for retailers, freelancers, and manufacturers.
Calculation Results
Understanding the Key Metrics
Profitability is more than just revenue. Our calculator helps you understand the three core components of pricing strategy.
Profit
The simplest measure: the money left over after subtracting your costs from your revenue. It's the absolute amount you earn.
Profit Margin (%)
The percentage of your selling price that is actual profit. A 25% margin means for every $100 in sales, you keep $25.
Markup (%)
The percentage you add to your cost to determine the selling price. A 100% markup means you are selling an item for double its cost.
Profit Margin vs. Markup: What's the Difference?
Many people use these terms interchangeably, but they represent different calculations and provide different insights into your business's health.
Profit Margin
Margin is profit relative to the selling price.
Formula: (Selling Price - Cost) / Selling Price
Example: If you sell a product for $100 that cost you $75, your profit is $25, and your profit margin is 25%.
Markup
Markup is profit relative to the cost.
Formula: (Selling Price - Cost) / Cost
Example: If you sell a product for $100 that cost you $75, your profit is $25, and your markup is 33.33%.
Who Should Use This Calculator?
Anyone involved in selling products or services can benefit from understanding their profitability. This tool is essential for:
Whether you are creating a price quotation, setting prices for a new product, or generating an invoice, this calculator ensures your pricing strategy is sound and sustainable.
For a more comprehensive analysis of your business's financial health, including gross margin and net profit margin which account for operating expenses, our Business Margin Calculator is the perfect next step.