How to use the Profit Margin Calculator
Margin = (Price − Cost) ÷ Price. Markup = (Price − Cost) ÷ Cost. A 50% markup is only a 33.3% margin — confusing the two is a common pricing mistake.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price; markup is profit as a share of cost.
How do I price for a target margin?
Price = Cost ÷ (1 − target margin). For cost 100 and a 40% margin, price = 100 ÷ 0.6 ≈ 166.67.