Free tool · Pricing
Profit margin & markup calculator
See your real profit on every sale, understand margin versus markup, and set prices that hit your target.
Find the right price
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How to use the Profit Margin & Markup Calculator
Margin vs markup, simply
- Profit = selling price − cost
- Margin = profit ÷ selling price × 100
- Markup = profit ÷ cost × 100
Mixing them up is one of the most common pricing mistakes: adding a 40% markup gives only a 28.6% margin. If your plan says "40% margin", price with the margin formula.
Your margin also decides how much you can spend on advertising. Plug it into our ROAS calculator to see the break-even return your ads need. Selling in the Gulf? Remove VAT first with the UAE & Saudi VAT calculator.
FAQ
Common questions
What is the difference between margin and markup?
Both use the same profit, but divide it by different numbers. Margin is profit ÷ selling price; markup is profit ÷ cost. A product that costs 60 and sells for 100 has a 40% margin but a 66.7% markup.
How do I calculate profit margin?
Subtract the cost from the selling price to get profit, then divide the profit by the selling price and multiply by 100.
What price do I need for a 40% margin?
Divide the cost by (1 − 0.40). For a cost of 60, that is 60 ÷ 0.6 = 100. The calculator does this for any target margin.
Should I include VAT or sales tax?
No. Use prices before VAT or sales tax, because the tax is passed on to the government and is not your profit. Our VAT calculator can strip VAT from a price first.
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