Find your profit margin and markup, or work out the price that hits a target margin. Margin and markup are not the same thing, and this shows both.
Margin vs markup
Both compare profit to something, but not to the same thing, and mixing them up is one of the most common pricing mistakes.
Margin = profit ÷ price × 100 Markup = profit ÷ cost × 100
An item that costs $60 and sells for $100 makes $40 profit. That's a 40% margin (40 ÷ 100) but a 66.67% markup (40 ÷ 60). If you want a 40% margin and add 40% to cost instead, you'd charge $84 and get only a 28.6% margin.
| Markup | Equals margin of |
|---|
| 25% | 20% |
| 33.3% | 25% |
| 50% | 33.3% |
| 66.7% | 40% |
| 100% | 50% |
| 150% | 60% |
Price from a target margin
Price = cost ÷ (1 − margin)
To make a 25% margin on a $60 item: 60 ÷ 0.75 = $80. A margin can never reach 100%, because that would mean the cost is zero.
Gross vs net margin
This calculator gives gross margin: price minus the direct cost of the item. Net margin also subtracts rent, wages, ads and other overheads, so it's always lower. To see how many sales cover those overheads, use the break-even calculator.
How we checked this
Before every update, this calculator is run in a real browser with these known answers, and it must match all of them:
- Cost $60, price $100: 40% margin, 66.67% markup ✓
- Cost $60 at 25% margin: price $80 ✓
- Cost $60 with 50% markup: price $90 ✓
Last checked October 26, 2026. Spotted something wrong? The math is done in your browser with the formula shown on this page, so you can check any result by hand.
Questions people ask
What is a good profit margin?
It depends heavily on the industry. Grocery stores often run on low single-digit net margins, while software can be far higher. Compare against businesses like yours rather than a single rule.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup). A 50% markup is 0.5 ÷ 1.5 = 33.3% margin.
How do I convert margin to markup?
Markup = margin ÷ (1 − margin). A 40% margin is 0.4 ÷ 0.6 = 66.7% markup.
Why can't margin be 100%?
Margin is profit as a share of price. To reach 100%, the item would have to cost nothing.