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Profit Margin Calculator

Use this profit margin calculator to quickly find your profit margin based on revenue and cost. Works for ecommerce, retail, freelance pricing, and small business planning.

Total revenue or selling price.

Total cost of goods or services.

How to Use

1 Enter your total revenue or selling price.
2 Enter your total cost.
3 Click Calculate.
4 Review your profit, margin percentage, and markup.

Formula

Profit Revenue − Cost
Profit Margin (%) (Profit ÷ Revenue) × 100
Markup (%) (Profit ÷ Cost) × 100

Example Calculation

If your selling price is $100 and your cost is $60:

Profit = $100 − $60 = $40
Profit Margin = ($40 ÷ $100) × 100 = 40%
Markup = ($40 ÷ $60) × 100 = 66.67%

Your product has a 40% profit margin and a 66.67% markup.

Why It Matters

Profit margin helps you understand whether your pricing is sustainable. It shows how much money your business keeps from each sale after direct costs. A higher margin gives you more room for overhead, growth, and unexpected expenses.

Who Uses This Calculator?

  • • People comparing loan, mortgage, salary, savings, tax, or investment scenarios before making a money decision.
  • • Homeowners, borrowers, employees, freelancers, and small business owners who need fast estimates without a spreadsheet.
  • • Anyone who wants to understand the inputs, formula, and tradeoffs behind a financial result.

Frequently Asked Questions

What is a good profit margin?
It depends on the industry. Retail businesses often operate at 2%–10%, software companies at 60%–80%, and service businesses at 15%–30%. The key is to compare your margin to industry benchmarks.
What is the difference between margin and markup?
Margin is the percentage of revenue that is profit. Markup is the percentage added on top of cost. They are related but not the same. For example, a 50% markup on a $100 cost gives a $150 price, but the margin is only 33.3%.
Can I use this for ecommerce?
Yes. This calculator works well for ecommerce products, wholesale pricing, retail pricing, and service businesses.
Does profit margin include overhead?
This calculator uses direct cost only. If you want a more complete picture, include overhead (rent, salaries, marketing) in your cost input.
Is gross profit the same as profit margin?
No. Gross profit is the money left after cost, expressed as a dollar amount. Profit margin is that same amount expressed as a percentage of revenue.

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This calculator provides estimates for informational purposes only and is not financial, tax, or legal advice. Consult a qualified professional before making financial decisions.