Profit Margin Calculator

Work out profit, profit margin, and markup from your revenue and cost.

Total amount you sell the item for.

What it costs you to make or buy it.

Result—

Enter your values and calculate to see the result.

Formula used

Profit      = Revenue − Cost
Margin %    = (Profit ÷ Revenue) × 100
Markup %    = (Profit ÷ Cost) × 100
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Worked example

Revenue (selling price): $1,000   Cost: $600

Profit: $1,000 − $600 = $400

Margin %: ($400 ÷ $1,000) × 100 = 40%

Markup %: ($400 ÷ $600) × 100 ≈ 66.67%

Frequently asked questions

What is the difference between profit margin and markup?

Profit margin is profit divided by the selling price (revenue), so it shows how much of each sale you keep. Markup is profit divided by your cost, so it shows how much you added on top of what the item cost you. Margin is always smaller than markup when both are positive.

How do I calculate profit margin from cost and selling price?

Subtract cost from selling price to get profit, then divide profit by the selling price and multiply by 100. For example, a $1,000 sale that cost $600 gives $400 profit and a 40% margin.

Can profit margin be negative?

Yes. If your cost is higher than your revenue, profit is negative and so is the margin — meaning you lose money on each sale. That is a signal to raise price or cut costs.

What is a good profit margin?

It varies widely by industry. Many small retailers aim for 5-10% net margin, while software and service businesses often target 20% or more. Compare against others in your specific field rather than a single number.