Calculate your profit margin, markup percentage, and net profit from revenue and cost.
Enter your total revenue (selling price) and total cost (what you paid or spent to produce the goods or service).
The calculator returns your gross profit in dollars, the profit margin as a percentage of revenue, and the markup as a percentage of cost.
Profit margin shows what portion of revenue is profit, while markup shows how much you added on top of your costs. Both are critical for pricing strategy.
Profit margin and markup formulas:
Profit = Revenue − CostProfit Margin = (Profit / Revenue) × 100%Markup = (Profit / Cost) × 100%Example: You sell a product for $150 that costs $90 to produce:
Example 2: Revenue of $500, cost of $375:
Profit margin is profit as a percentage of revenue (selling price). Markup is profit as a percentage of cost. A 50% markup equals a 33.3% margin. Margin is always lower than markup for the same transaction.
It varies by industry. Retail typically sees 2–5% net margins, software companies 20–40%, and service businesses 15–25%. Gross margins (before overhead) are higher: 50%+ is common in software and luxury goods.
To achieve a desired margin, use: Selling Price = Cost / (1 − Desired Margin). For example, to get a 40% margin on a $60 item: $60 / (1 − 0.40) = $100.