Budgeting & Income
Profit Margin Calculator
Margin and markup measure the same profit from two angles, and confusing them mis-prices products. Enter your cost and sale price to see the profit, the margin (profit as a share of the price), and the markup (profit as a share of cost).
Profit margin
60%
Share of the sale price you keep as profit.
- Profit per unit
- $150
- Markup
- 150%
- Cost
- $100
Profit as a share of your cost.
How this calculator works
Profit = revenue − cost. Margin = profit ÷ revenue; markup = profit ÷ cost. When revenue or cost is zero the corresponding ratio is reported as zero rather than undefined.
This is gross margin on one unit — it reflects direct cost only. Net (bottom-line) margin also subtracts overhead, taxes, and other operating costs, so it's always lower than the gross margin shown here.
Try an example
Frequently asked questions
What's the difference between margin and markup?
They measure the same profit against different bases. Margin is profit as a percent of the sale price; markup is profit as a percent of the cost. A product costing $100 sold for $250 has a $150 profit — a 60% margin (150 ÷ 250) but a 150% markup (150 ÷ 100). Margin is always the smaller number.
How do I calculate profit margin?
Subtract cost from the sale price to get profit, then divide by the sale price and multiply by 100. Profit of $150 on a $250 sale is 150 ÷ 250 = 60% margin. This is gross margin — it covers the direct cost of the item, before overhead like rent, marketing, and salaries.
What is a good profit margin?
It varies widely by industry — grocery stores run on single-digit margins while software can exceed 80%. For many small product businesses, a gross margin of 40–60% is healthy because overhead and taxes still come out of it. Compare against your own category, not a universal target.
How do I set a price for a target margin?
Divide your cost by (1 minus the target margin). To hit a 60% margin on a $100 cost: $100 ÷ (1 − 0.60) = $250. Note you divide by one-minus-the-margin, not multiply by the markup — mixing the two is the most common pricing mistake.
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Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.