Margin is profit as a share of the selling price; markup is profit as a share of cost. A 50% markup is only a 33.3% margin – mixing them up is one of the most common pricing mistakes.
How to use the Margin Calculator
- Cost
- Margin
- Every result field is editable: type into Revenue (selling price) or any other result and Margin plus every other field update to match.
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the cost and the margin you want – or type a revenue or profit into the results.
Tips
- Know the difference between margin (profit ÷ price) and markup (profit ÷ cost).
- Apply successive discounts one after another – they do not simply add up.
- Check whether prices already include sales tax or VAT.
- Round prices only at the very end of the calculation.
Common mistakes to avoid
- Adding discount percentages together.
- Pricing from a target margin using the markup formula.
- Forgetting payment-processing and shipping fees.
Inputs explained
| Field | What to enter |
|---|---|
| Cost | Amount in your currency |
| Margin | In % |
What each result means
- Revenue (selling price) = [Cost]÷(1 – [Margin]÷100)
- Profit = [Revenue (selling price)] – [Cost]
- Markup = [Profit]÷[Cost]×100
Example values
How the main result changes when Margin changes and everything else stays at the example values above:
| Margin (%) | Revenue (selling price) |
|---|---|
| 12.5 | 68.57 |
| 18.75 | 73.85 |
| 25 | 80 |
| 31.25 | 87.27 |
| 37.5 | 96 |
| 50 | 120 |
Formula
Margin = profit ÷ revenue × 100Revenue = cost ÷ (1 − margin)Profit = revenue − costMarkup = profit ÷ cost × 100Worked example
Inputs — Cost: $60; Margin: 25 %.
Results — Revenue (selling price) = $80.00; Profit = $20.00; Markup = 33.33 %.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit ÷ price; markup is profit ÷ cost.
What is a good profit margin?
It varies – retail often 20–50% gross, software 70%+.
Can margin be over 100%?
No; markup can be.
What formula does the Margin Calculator use?
Margin = profit ÷ revenue × 100.