Calculation desk / pricing
Profit Margin Calculator
Calculate gross profit, profit margin, and markup from revenue and cost.
Profit Margin Calculator: See how much of your selling revenue remains after the cost you enter. This calculator reports profit, profit as a percentage of revenue, and markup on cost, so you can distinguish the two percentages for the same sale or reporting period. Runs 100% locally in your browser with zero server file uploads.
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Profit margin
35%
- Gross profit
- $350.00
- Markup on cost
- 53.85%
Profit margin = (revenue − cost) ÷ revenue × 100- Revenue and cost cover the same period and scope.
- Taxes, financing, and overhead are excluded unless included in cost.
Formula and worked example
Profit margin = (revenue − cost) ÷ revenue × 100
A worked example with sample values:
| Inputs | |
|---|---|
| Revenue | $1,000.00 |
| Cost | $650.00 |
| Results | |
|---|---|
| Profit margin | 35% |
| Gross profit | $350.00 |
| Markup on cost | 53.85% |
Profit and its two percentage bases
Profit = revenue − cost. Margin (%) = profit ÷ revenue × 100. Markup (%) = profit ÷ cost × 100. Revenue of 1,000 and cost of 650 give profit of 350, margin of 350 ÷ 1,000 × 100 = 35%, and markup of 350 ÷ 650 × 100 ≈ 53.85%.
OpenStax describes gross margin as the share of sales converted to gross profit (https://openstax.org/books/principles-marketing/pages/2-4-marketing-plan-progress-using-metrics). Keep revenue and costs on the same basis: comparing all revenue from a period with costs for only some of those sales would inflate the apparent margin.
Converting margin into a cost-based markup
Equivalent markup (%) = 100 × margin ÷ (100 − margin), for margin below 100%. Conversely, margin (%) = 100 × markup ÷ (100 + markup). If you need to set a price from cost, use the markup calculator after converting the target percentage.
| Margin on revenue | Matching markup on cost |
|---|---|
| 10% | 11.11% |
| 20% | 25% |
| 25% | 33.33% |
| 35% | 53.85% |
| 50% | 100% |
For multiple sales, calculate the overall percentage from total profit and total revenue, rather than averaging product margins without revenue weights. A large low-margin sale contributes more to the combined result than a tiny high-margin sale. The table assumes positive revenue and cost and rounds the converted percentages for display.
How to use it
- Enter values that cover the same scope and reporting period.
- Choose a display currency when the calculation includes money.
- Calculate, then review the formula and assumptions beside the result.
Privacy & limitations
Every value and calculation stays in your browser. This is a planning utility, not accounting, tax, legal, or investment advice. Verify material decisions in your source system and with an appropriate professional.
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Frequently asked questions
Why is markup higher than margin for a profitable sale?
Both use the same profit amount, but markup divides by cost and margin divides by revenue. When revenue exceeds positive cost, the cost denominator is smaller, so the markup percentage is larger. The figures are equal at zero profit.
Can profit margin be negative?
Yes. Cost above revenue gives a loss and a negative margin. For example, revenue of 100 and cost of 120 give profit of −20 and margin of −20%. This page accepts that relationship, but requires both revenue and cost to be positive.
Does the result represent gross margin or net margin?
That depends on the costs you enter. Cost of goods or delivery produces a gross-profit view; including further expenses changes the scope. The tool labels the amount gross profit and does not separately deduct overhead, interest or tax, so document your cost basis.
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