Calculate gross profit, profit margin and markup from your cost and selling price.
$40.00
Profit margin
40%
Markup
66.67%
Profit margin and markup are two different ways to describe the same profit—but using different denominators. Many people confuse them, yet they tell you different things. Margin shows profit as a percentage of the selling price; markup shows it as a percentage of cost. A 50% markup doesn't mean a 50% margin; in fact, it's only a 33% margin. This calculator shows you both so you can compare.
Buy something for $60 and sell it for $100: you make $40 profit. That's a 40% margin (40÷100) but a 66.7% markup (40÷60).
Markup is always larger than margin because you divide by a smaller number (cost vs. price). If markup and margin were equal, you'd be selling at cost.
What's the difference between margin and markup?
Margin measures profit against the selling price; markup measures it against cost. Both describe the same profit dollars, just different baselines. Margin is what buyers typically target; markup is what sellers think in.
How do I calculate profit margin?
Profit margin is (selling price − cost) ÷ selling price × 100%. It tells you what percentage of each sale is pure profit. A 40% margin means 40 cents of every dollar is profit (before taxes and overhead).
Is a higher markup always better?
Not necessarily. A high markup doesn't guarantee profit if volume is low or costs are high. Margin is often more useful for comparing profitability across different price points. Focus on the absolute profit dollars and your target margin percentage together.