business calculator
Margin Calculator
Set pricing confidently by calculating gross margin, markup, and selling price targets.
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Inputs, answers, and explainers are grouped for faster scanning on mobile and desktop.
Next step
Finish the calculation, then jump to a related tool without hunting through menus.
Calculate selling price and profit based on your desired margin
Enter cost and margin to see your ideal selling price and profit breakdown.
Margin
On Revenue
Markup
On Cost
Profit
Net Gain
Margin vs. Markup: What's the Difference?
One of the most common points of confusion in business accounting is the difference between Profit Margin and Markup. While both express profit as a percentage, they use different denominators.
Profit Margin
Margin is the ratio of profit to the Selling Price. It identifies how much of every dollar in sales actually ends up as profit.
Margin = (Profit / Selling Price) x 100
Markup
Markup is the ratio of profit to the Cost Price. It is the percentage added to the cost to reach the selling price.
Markup = (Profit / Cost Price) x 100
Why Margin Matters for Your Business
Knowing your gross profit margin is essential for determining if your business is sustainable. If your margins are too low, you may not be able to cover your operating expenses (rent, salaries, marketing) even if you have high sales volume.
Most industries have "standard" margins. For example, retail often targets a 50% margin (sometimes called "keystone pricing"), while software can have margins upwards of 80-90%.
Frequently Asked Questions
Can a profit margin be higher than 100%?▼
No. By definition, profit margin is a percentage of the selling price. Since profit cannot exceed the selling price (unless the product had a negative cost), the margin will always be less than 100%. Markup, however, can easily exceed 100% (e.g., if you buy for ₹10 and sell for ₹30, your markup is 200%).
Should I use margin or markup to set my prices?▼
Financial statements usually deal with margins. If your goal is to have a 20% net profit, you should think in terms of margin. If you want to simply "add a bit on top" of what you paid, you are thinking in terms of markup. Both are valid as long as you understand the math behind them.