Profit Margin Calculator

A profit margin calculator tells you how much of each sale you keep. You enter what something cost you and what you sold it for, and it works out the profit and the profit margin: the profit as a percentage of the selling price.

This calculator computes the simple margin on the figures you enter. It isn't a company's accounting net margin, which subtracts every expense, overheads, interest and tax included. See the FAQ below for how that differs from gross margin.

These two are often confused, and mixing them up is one of the most common pricing mistakes. They describe the same profit, measured against different amounts:

Say an item costs ₹60.00 and sells for ₹100.00, a profit of ₹40.00. The margin is ₹40.00 ÷ ₹100.00 × 100 = 40.00%, but the markup is ₹40.00 ÷ ₹60.00 × 100 = 66.67%. Same sale, two different percentages.

Margin can never reach 100% (the profit can't exceed the price), while markup has no upper limit. A 100% markup doubles the cost, but it is only a 50.00% margin.

Profit is simply revenue minus cost. If the answer is negative, it's a loss.

You can also work backwards from a margin you want:

• Selling price for a target margin: price = cost ÷ (1 − margin ÷ 100). For a 40% margin on a cost of 600: 600 ÷ 0.6 = 1,000.00.
• Maximum cost for a target margin: cost = price × (1 − margin ÷ 100). To keep a 40% margin at a price of 1,000: 1,000 × 0.6 = 600.00.

A common mistake is adding the margin to the cost: 600 plus 40% is 840, which is only a 28.57% margin.