Margin and markup are the two numbers small businesses mix up most, and confusing them is an expensive mistake. Both compare cost and price, but markup is profit as a percentage of cost, while margin is profit as a percentage of selling price. A product that costs $60 and sells for $100 has a 66.7% markup but only a 40% margin. If you add a 40% markup thinking you'll earn a 40% margin, you'll actually earn 28.6%. This free profit margin calculator clears that up. It has three modes. Cost + price shows your profit, gross margin and markup. Cost + target margin tells you the selling price you need to hit a margin goal (price = cost ÷ (1 − margin)). Cost + markup gives the price and the margin that markup really produces. A quick-reference table converts common markups into their true margins, and a quantity field shows total revenue and profit for a batch or month. Optionally, add sales tax or VAT to see the price your customer pays, because tax should never be counted as profit. It's ideal for Etsy and Shopify sellers, wholesalers, freelancers pricing products, and anyone building a price list. Choose your currency; everything runs in your browser.
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Markup → margin cheat sheet
Formulas
- Profit = Price − Cost
- Margin = Profit ÷ Price × 100
- Markup = Profit ÷ Cost × 100
- Price for a target margin = Cost ÷ (1 − margin)
- Margin from markup = markup ÷ (1 + markup)
FAQ
What’s the difference between margin and markup?
Margin is profit ÷ price; markup is profit ÷ cost. The same sale always has a higher markup than margin.
Can margin be over 100%?
No. Margin approaches 100% only as cost approaches zero. Markup can be any size.
Should cost include shipping and fees?
For a true margin, yes. Include materials, packaging, platform fees, payment fees and shipping you pay.
Is sales tax profit?
No. Tax is collected for the government; it’s shown separately and excluded from margin.
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