Profit Margin Calculator
Calculate gross profit margin, markup and the inverse — find a sale price for a target margin or the cost behind a given price.
Quick answer: Calculate gross profit margin, markup and the inverse — find a sale price for a target margin or the cost behind a given price.
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Frequently asked questions
- What's the difference between margin and markup?
- Margin is profit as a percentage of the sale price; markup is profit as a percentage of cost. A 50% markup is only a 33% margin — they always disagree, and confusing them is a classic source of pricing mistakes.
- Is the calculator accurate?
- Yes. The formulas are deterministic and unit-tested: margin = (sale − cost) / sale × 100, markup = (sale − cost) / cost × 100.
- Can I work backwards from a target margin?
- Yes. Switch to 'Cost + Margin' mode and we solve for the sale price as cost / (1 − margin%/100). 'Sale + Margin' mode solves for cost.
- What's a good profit margin?
- It depends entirely on the industry. Software businesses run 70–80% gross margin; supermarkets are happy with 2%; restaurants target 60–70% gross margin on food. Compare to peers in your sector.
- Does this account for tax?
- No — these are pre-tax gross margin figures. Subtract sales tax / VAT from the sale price first if you want the net result.
- Are my numbers uploaded?
- No. Everything runs in your browser — no inputs are sent to a server.
- Can I price multiple SKUs at once?
- The calculator runs one product at a time. For batches, paste a CSV into a spreadsheet and apply the same formula to a column.
- What if cost is zero?
- Then margin is 100% (everything is profit) but markup is undefined (division by zero). The calculator shows '—' for markup in that case rather than 'Infinity%'.
- Can margin exceed 100%?
- No — by definition margin ranges 0 to 100% (negative if you sell at a loss). Markup, on the other hand, can exceed 100% (a 200% markup triples the cost).
- What about contribution margin and net margin?
- Both are different concepts. Contribution margin subtracts variable costs only (covered by the Break-even calculator). Net margin subtracts all costs including overhead and tax.