Profit Margin
Calculate gross, operating, and net profit margins
Calculators on this site provide estimates for general informational purposes only. They are not financial, investment, tax, or legal advice. Consult a qualified professional before making any decision.
How to use Profit Margin
- 1Choose 'cost-plus' or 'price-backward' mode.
- 2Enter cost and target margin (or enter price to solve for cost/profit).
- 3See profit, gross margin, and the minimum price to hit your target.
How margin works: cost vs price
margin = (price − cost) ÷ price; price = cost ÷ (1 − margin)Margin is based on price, markup on cost—easy to confuse. A 50% 'markup' is NOT a 50% 'margin': markup puts half the cost as profit, while margin puts half the price as profit.
To price, use 'cost ÷ (1 − target margin)'. E.g. cost 80, target margin 40% → price = 80 ÷ 0.6 ≈ 133.
Useful for e-commerce, restaurants, and freelancers to cover costs and lock in real profit instead of 'selling but not earning'.
Frequently asked questions
Is margin the same as markup?
No. Margin = profit÷price, markup = profit÷cost. At the same number, markup implies a lower margin.
What price for 40% profit?
price = cost ÷ (1 − 40%). At cost 100, price ≈ 167, profit ≈ 67, margin exactly 40%.
Why is real profit lower than calculated?
Hidden costs like platform fees, shipping, refunds, and taxes are often missed. Fold them into cost before pricing back.
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