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About this tool
Gross margin, markup and profit from cost and selling price.
The Profit Margin Calculator takes a cost and a selling price and returns the gross margin as (price minus cost) divided by price, alongside the cash profit and the equivalent markup, which divides the same profit by cost instead. Enter 60 and 100 and you get a 40 percent margin, 40 in profit and a 66.67 percent markup — the two percentages that people most often confuse. It is for anyone pricing a product, checking a quote or sanity-testing a supplier deal.
Open Profit Margin Calculator on AltFTool — it loads instantly in your browser.
Enter the cost of your product or service into the Profit Margin Calculator to establish your base expense
Input the selling price of your product or service to calculate the revenue generated
There is no calculate button; the Result panel updates live as you type, reading '40.00% margin' for the 60 and 100 defaults, with Profit and Markup shown beneath it as 40 and 66.67%
Both percentages come out of the same cost and price, which is the fastest way to stop confusing the two.
The absolute profit is shown next to the ratios, so a high margin on a small ticket does not look better than it is.
Cost and selling price are the only fields, so you can re-check a price in the middle of a negotiation.
Margin divides profit by the selling price; markup divides the same profit by the cost. A product costing 60 and selling at 100 has a 40 percent margin but a 66.67 percent markup, and markup is always the larger of the two figures for a profitable sale.
Subtract the cost from the selling price, divide by the selling price, then multiply by 100. That is exactly what this calculator does, so cost 60 and price 100 gives (100 - 60) / 100 = 40 percent.
It depends entirely on the trade — grocery retail commonly runs on single-digit gross margins while software can exceed 80 percent — so compare against your own sector rather than a universal target. Use this figure as gross margin only; it excludes overheads, wages and tax, and a tax adviser or accountant should confirm your net position.
Yes, if the cost is higher than the selling price the profit is negative and so is the margin, which means you are selling at a loss. A margin of exactly 0 percent means you are covering cost and nothing else.
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