Enter what an item costs you and what you sell it for — or the margin you want — and get the numbers that decide whether it pays.
Profit margin calculator
Free, no sign-up ·
$
What you pay for it, or its ingredients
$
Gross margin
60.0%
Profit per item
6.00
Markup on cost
150.0%
Works in any currency — the $ is only a placeholder.
Profit margin is profit divided by the selling price; this calculator works it out from cost and price, or works backwards from the margin you want to the price you should charge.
How profit margin is calculated
| Figure | Formula |
|---|---|
| Profit | Price − Cost |
| Gross margin % | (Price − Cost) ÷ Price × 100 |
| Markup % | (Price − Cost) ÷ Cost × 100 |
| Price for a target margin | Cost ÷ (1 − Margin %) |
An item that costs $4 and sells for $10 makes $6 profit: a 60% margin (6 ÷ 10) and a 150% markup (6 ÷ 4). Margin is always measured against the price and can never reach 100%; markup is measured against the cost and has no ceiling. The difference is the most common pricing mistake — see margin vs markup.
The calculation works in any currency. For a full walk-through with pricing examples, read how to calculate profit margin.
Questions
- What is a good profit margin for a small business?
- It depends on the business: cafés and restaurants commonly aim for gross margins of 60–75% on food and drink, while retail often runs at 30–50%. Compare items against each other and against your own costs rather than a single industry number.
- What is the difference between margin and markup?
- Margin is profit as a share of the selling price; markup is profit as a share of the cost. An item bought for $4 and sold for $10 has a 60% margin and a 150% markup.
- How do I calculate the selling price from a target margin?
- Divide the cost by one minus the margin. For a 60% margin on an item that costs $4, the price is $4 ÷ 0.40 = $10.
- Does this calculator include taxes or overheads?
- No. It calculates gross margin on a single item from its cost and price; rent, wages and other overheads are covered by the break-even calculator.
Keep reading
- Free toolMarkup calculatorFree markup calculator: set a cost and a markup percentage to get the selling price, profit and the margin it really gives. Converts markup to margin both ways.
- Free toolBreak-even calculatorFree break-even calculator: enter monthly fixed costs, average price and variable cost per sale to see how many sales a month — and a day — cover your costs.
- GuideHow to calculate profit margin (and price for it)Profit margin is profit divided by revenue. Learn the margin and markup formulas, how to price for a target margin, and the mistakes that quietly cost money.
- GlossaryGross profit marginGross profit margin is the share of each sale left after the cost of the goods. See the formula, a worked example, margin vs markup, and common mistakes.
- GlossaryMarkupMarkup is the percentage you add to cost to set a price. The formula, how to price from a target margin, a worked example and the mistakes that cost money.
- FeatureSales & InsightsTrack every sale and see your day live: takings vs a usual day, best sellers, busiest hours, profit after expenses and plain-language findings. Free.
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