Business tool

Profit Margin & Markup Calculator

Enter cost and selling price to get both margin and markup — they answer different questions and are easy to mix up.

—Profit
—Margin (% of selling price)
—Markup (% of cost)

Margin vs markup

Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. A 50% markup on a ₹500 cost gives a ₹750 selling price — but that's only a 33% margin, since the ₹250 profit is 33% of ₹750, not 50%. Mixing these up is a common pricing mistake.

About the Profit Margin & Markup Calculator

The Profit Margin Calculator works out profit margin and markup from a cost price and a selling price. Enter both and see the profit, the margin percentage and the markup percentage. It is useful for shops, freelancers and anyone setting prices.

Margin is profit divided by selling price, while markup is profit divided by cost. They are different measures: a product costing 500 and sold at 750 has a 50 percent markup but a 33.3 percent margin. Gross margin does not account for operating expenses, taxes or discounts, so it is only a first look at profitability.

How to use it

  1. Enter the cost price.
  2. Enter the selling price.
  3. Read profit, margin and markup.
  4. Change the selling price to see the effect on margin.

Tips and good to know

Frequently asked questions

How do I get a 40 percent margin?

Selling price = cost ÷ (1 − 0.40).

Which is bigger, margin or markup?

Markup is always larger than margin for the same profit.

Does it include tax?

No.