About the Profit Margin Calculator
Tezmy's Profit Margin Calculator helps you price products and understand your profit. Enter what something costs you and what you sell it for to see the profit, the profit margin and the markup. Or enter your cost and the margin or markup you want, and it tells you the price to charge. It also explains the difference between margin and markup, the most common pricing mistake small businesses make.
Updated October 2026
How to use the Profit Margin Calculator
- 1Choose what you want to find.
- 2Enter your cost.
- 3Enter the selling price, or the margin or markup you want.
- 4Read the profit, margin, markup and price.
Margin vs markup, simply
Both compare profit to a price, but a different price. Margin is profit divided by the selling price. Markup is profit divided by the cost. Buying for 60 and selling for 100 gives a profit of 40: that's a 40% margin (40 ÷ 100) but a 66.7% markup (40 ÷ 60). Mixing them up means charging less than you planned.
How to price for the margin you want
To reach a target margin, divide the cost by (1 − margin). For a 40% margin on a cost of 60: 60 ÷ 0.6 = 100. Enter your cost and target margin, and the calculator gives the selling price directly.
Count every cost
Include these in your cost for a realistic margin. Prices that include VAT or GST should have the tax removed first; use the VAT Calculator.
- The product itself, plus shipping to you and packaging.
- Marketplace, payment and card fees (often 2–15% of the sale).
- Delivery to the customer if you don't charge it separately.
- Returns, discounts and damaged stock, spread across your sales.
Healthy margins vary by business
A supermarket may work on a few percent, while software or handmade goods may have much higher margins. What matters is that your margin covers your running costs (rent, wages, advertising) and still leaves a profit. Check how a sale affects it with the Discount Calculator.
Use it on your phone while buying stock
At a market or supplier, enter the price you're offered and the price you can sell for to see your margin instantly. It works in any mobile browser, needs no sign-up, and the numbers stay on your device. To work out a sale price after a discount use the Discount Calculator, and for a share of any total the Percentage Calculator.
Features
- Margin and markup together
- Price for a target margin
- Price for a target markup
- Profit per sale
- Any currency
- Clear margin vs markup explanation
Frequently asked questions
What's the difference between margin and markup?
Margin is profit divided by the selling price. Markup is profit divided by the cost. The same sale always has a higher markup than margin.
How do I calculate profit margin?
Subtract cost from price to get profit, then divide profit by price and multiply by 100. ($100 − $60) ÷ $100 × 100 = 40%.
What price gives me a 40% margin?
Divide the cost by (1 − 0.40). For a $60 cost: $60 ÷ 0.6 = $100.
Can margin be 100% or more?
No. Margin is a share of the price, so it's always below 100% (unless the cost is zero). Markup, however, can be any size.
Should cost include shipping and fees?
Yes. For a true margin, include everything it costs to make and sell one unit: materials, shipping, packaging and payment fees.
What is a good profit margin?
It depends on the industry. Many small online shops aim for 30–50% gross margin to cover fees, ads and returns, but grocery and electronics sellers often work on much less.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup). A 50% markup is a 33.3% margin. The calculator shows both at once.
Can I use any currency?
Yes. Choose your currency symbol; the percentages work the same everywhere.