Skip to content
RoomCalcs

Profit margin and markup calculator

Enter what an item costs you and what you sell it for to see your profit, margin and markup — or enter the margin or markup you want and get the selling price. Made for shopkeepers, online sellers and small businesses.

1Cost, price and margin

Pick what you know and what you want to work out.

What one item costs you to buy or make, including delivery to your shop.

What the customer pays for one item, without sales tax / GST.

2Quantity (optional)

Optional. See the totals for this many items.

Your results

Your results appear here

Type your measurements in the empty boxes. Still needed:

  • Cost price
  • Selling price
  • Free
  • No sign-up
  • PDF & CSV

How do I calculate profit margin?

  1. 1Choose what you want to find: margin and markup, a selling price, or the highest cost you can pay.
  2. 2Enter the numbers you know — cost, price, margin % or markup %.
  3. 3Optionally enter how many items you sell for total sales and profit.
  4. 4Read the profit, the margin and the markup — side by side, so you never mix them up.

What is the formula for margin and markup?

  1. 01Profit = selling price − cost
  2. 02Margin % = profit ÷ selling price × 100
  3. 03Markup % = profit ÷ cost × 100
  4. 04Price for a margin = cost ÷ (1 − margin)
  5. 05Price for a markup = cost × (1 + markup)
  6. 06Margin = markup ÷ (1 + markup) · markup = margin ÷ (1 − margin)

Margin and markup use the same profit but divide it by different numbers. Buy for 800 and sell for 1,000: the profit is 200. As a share of the price that is a 20% margin; as a share of the cost it is a 25% markup.

That is why adding 20% to the cost does not give a 20% margin. 800 + 20% = 960, and 160 ÷ 960 is only a 16.7% margin. For a true 20% margin divide by 0.8: 800 ÷ 0.8 = 1,000.

Margin can never reach 100% (the item would have to be free), but markup can be any size: a 100% markup doubles the cost and gives a 50% margin.

Shops usually think in markup when pricing and in margin when checking profit. Accountants and most business reports use margin.

What is the margin on an item bought for 800 and sold for 1,000?

Buy an item for 800 and sell it for 1,000: the profit is 200.

That is a 20% margin (profit ÷ price) and a 25% markup (profit ÷ cost).

Sell 50 of them and you make 10,000 from 50,000 of sales.

Good to know

  • Don't add your wanted margin to the cost — divide the cost by (1 − margin) instead.
  • Put every per-item cost in the cost price: delivery, packing, card or platform fees.
  • Leave sales tax / GST out of the selling price; it isn't your profit.
  • A 50% markup is only a 33.3% margin; a 100% markup is a 50% margin.

Profit margin and markup questions

How do you calculate profit margin?

Profit margin = (selling price − cost) ÷ selling price × 100. Buy for 600 and sell for 750: the profit is 150, and 150 ÷ 750 = 20% margin.

What is the difference between margin and markup?

Both start from the same profit. Margin divides it by the selling price, markup divides it by the cost. So the markup is always the bigger number: a 25% markup is a 20% margin.

How do I find the selling price from cost and margin?

Divide the cost by (1 − margin). For a 30% margin on a cost of 700: 700 ÷ 0.7 = 1,000. Simply adding 30% (910) would give only a 23.1% margin.

What is a good profit margin for a shop?

It varies a lot by trade. Groceries and mobile phones often run on thin margins, while clothes, cosmetics and handmade goods usually need much higher ones to cover rent, staff and unsold stock. Compare with others in your trade and remember the margin must pay all running costs.

How do I calculate profit percentage on cost?

That is the markup: profit ÷ cost × 100. Many shopkeepers call it profit percentage. Bought for 400 and sold for 500: 100 ÷ 400 = 25% profit on cost.

Sources

Formulas last reviewed: September 30, 2026 ·How we check our formulas

Related tools