How it works
Subtract the cost price from the selling price to find gross profit. Divide that profit by the selling price, then multiply by 100.
A worked example
If an item costs 60 and sells for 100, gross profit is 40. Dividing 40 by revenue of 100 gives a 40% margin. Dividing 40 by cost of 60 gives a 66.67% markup.
Before you use the result
These calculations describe gross amounts. They do not automatically deduct overhead, payment fees, returns, tax, or financing costs. A gross profit or margin is not the same as net business profit.
Keep inputs on a consistent basis. Use the same currency and time period, and check whether your amounts include tax. Calculations use full precision internally; displayed monetary values are rounded to two decimals.
Questions, answered.
What is profit margin?
Profit margin is the percentage of the selling price that remains after subtracting the cost.
What is the difference between margin and markup?
Margin compares profit with revenue. Markup compares profit with cost, so the percentages are different.
What is a good profit margin?
A good margin depends on your industry, operating costs, competition, and business model.
Calculation methods: read our methodology. Found a problem? Send a correction.