Use this free Profit Margin Calculator to calculate profit, profit margin and markup from your revenue and costs.
Enter your total revenue or selling price and the associated costs. The calculator will determine your profit amount, profit margin percentage and markup percentage.
Profit Margin Information
Profit margin measures profit as a percentage of revenue.
Markup measures profit as a percentage of cost.
For example, an item that costs $75 and sells for $100 has a 25% profit margin but a 33.33% markup.
How Is Profit Margin Calculated?
What Does Profit Margin Mean?
Profit margin shows how much of your revenue remains as profit after the costs included in the calculation.
For example, a 25% profit margin means that $0.25 of every $1.00 of revenue remains as profit based on the costs entered.
The type of margin being calculated depends on which costs you include. If you enter only the direct cost of producing goods or services, the result may represent a gross profit margin. If you include all business expenses, the calculation may be closer to a net profit margin.
Profit Margin vs. Markup
Profit margin and markup both compare profit with another financial amount, but they use different starting points.
Profit margin compares profit with revenue, while markup compares profit with cost. Because the denominators are different, the percentages will normally be different.
This distinction is important when pricing products or services. Adding a 25% markup to cost does not produce a 25% profit margin.
Results are estimates based entirely on the amounts entered by the user. The meaning of the calculated margin depends on which revenues and costs are included. This calculator is not a substitute for professional accounting, bookkeeping, tax, financial or business advice.