Profit Margin & Markup Calculator
Calculate profit per sale, profit margin, markup on cost and the selling price required to reach a target margin.
Know the difference between margin and markup.
See unit profit, profit margin, markup and the selling price required for your target margin.
Method: Profit = selling price − total variable cost. Margin = profit ÷ selling price. Markup = profit ÷ cost. Target price = cost ÷ (1 − target margin).
Your entries are calculated on this device and are not intentionally saved by LifeWidget.
A clear answer, with the method included.
How to use this profit margin & markup calculator
- Enter the requested information in the fields above.
- Check that the values match your situation.
- Read the result, then copy it if you need it elsewhere.
The formula
Profit = selling price − total variable cost. Profit margin = profit ÷ selling price × 100. Markup = profit ÷ total variable cost × 100. Target price = total cost ÷ (1 − target margin).
Example
A product selling for $100 with $65 in total variable costs makes $35 profit, a 35% margin and a 53.85% markup on cost.
Good to know.
Are margin and markup the same?
No. Margin divides profit by selling price, while markup divides profit by cost. The same sale therefore produces different percentages.
What costs should I include?
Include costs that belong to one sale, such as product or delivery labor, packaging, transaction fees and commissions. Fixed overhead belongs in a broader profitability or break-even analysis.
Why is a 100% target margin impossible?
A 100% margin would require the cost to be zero or the price to be infinitely high. The target margin field is therefore limited to less than 100%.
Can I use this for services?
Yes. Use the client price as selling price and the direct labor, contractor, software and payment costs required to deliver that job as costs.