Profit Margin Calculator
Profit margin is how much of each sale you keep, measured against the price. Enter the price and the cost to see the profit, the margin, and the markup that matches it — two numbers people constantly mix up.
Your numbers
Result
- Equivalent markupprofit over cost
- 50%
| Item | Value |
|---|---|
| Selling price | $150.00 |
| Cost | $100.00 |
| Profit | $50.00 |
How to calculate profit margin
Margin is profit over price: (price − cost) ÷ price × 100. Selling a $100 item for $150 is $50 profit and a 33.3% margin. That is different from markup, which measures the same $50 profit against the cost (a 50% markup). Margin is always the smaller of the two numbers.
Gross vs net margin
This is margin over the direct cost of the item — the gross margin. Net margin also subtracts overhead, taxes, shipping and payment fees, and it is what actually reaches the bottom line. To avoid a nasty surprise, either fold every cost into the cost field, or price with those extras in mind.
Frequently asked questions
Sources
- Managerial accounting — margin and profitability
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