Profit Margin Calculator
Calculate gross margin, markup percentage, and profit per unit. Compare margin vs markup side-by-side and find your break-even point.
Calculate By
Revenue & Cost
Scale to see total revenue and profit
Rent, salaries, etc. for break-even analysis
Per-Unit Results
Gross Margin
40.00%
Profit per Unit
$40.00
Markup
66.67%
Selling Price
$100.00
Cost per Unit
$60.00
Revenue Breakdown
Margin vs Markup
Gross Margin
Profit ÷ Revenue = $40.00 ÷ $100.00
Markup
Profit ÷ Cost = $40.00 ÷ $60.00
Common Margin & Markup Reference
| Margin | Markup | Cost | Selling Price | Profit |
|---|---|---|---|---|
| 10% | 11.11% | $60.00 | $66.67 | $6.67 |
| 20% | 25.00% | $60.00 | $75.00 | $15.00 |
| 25% | 33.33% | $60.00 | $80.00 | $20.00 |
| 30% | 42.86% | $60.00 | $85.71 | $25.71 |
| 40% | 66.67% | $60.00 | $100.00 | $40.00 |
| 50% | 100.00% | $60.00 | $120.00 | $60.00 |
| 60% | 150.00% | $60.00 | $150.00 | $90.00 |
Based on your cost of $60.00 per unit. Your current margin is highlighted.
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How to Use the Profit Margin Calculator
This profit margin calculator helps you understand the profitability of your products or services from multiple angles. Start by choosing your calculation mode. “Revenue & Cost” is the most common — enter what you sell a product for and what it costs you. “Target Margin” lets you work backwards from a desired margin percentage to find the maximum cost you can afford. “Markup” starts from cost and adds your desired markup percentage to calculate the selling price.
Understanding the results: The calculator shows your gross margin (profit as a percentage of selling price) and markup (profit as a percentage of cost) simultaneously. These two numbers describe the same profit from different perspectives. The visual revenue breakdown bar makes it easy to see at a glance how much of each sale is cost vs profit. The margin vs markup comparison panel shows the formulas used so you understand exactly how each number is derived.
Scaling to volume: Enter the number of units to see total revenue, total cost, and gross profit at scale. If you have fixed costs — rent, salaries, equipment leases, insurance — enter them to unlock break-even analysis. The calculator will show exactly how many units you need to sell to cover all costs, and whether your current volume puts you above or below that threshold.
Using the reference table: The margin and markup reference table at the bottom shows how common margin percentages translate to markup, selling price, and profit based on your actual cost per unit. Your current margin is highlighted so you can quickly see where you fall and what moving to a higher or lower margin target would look like in real dollars.
Sharing and comparing: Use the share button to generate a URL encoding your current inputs. This is useful for comparing pricing strategies — create one link for your current pricing and another for a proposed change, then compare them side by side. All calculations happen in your browser and your data is never sent to any server.
Frequently Asked Questions
What is the difference between margin and markup?
Margin and markup both measure profitability but use different denominators. Gross margin is profit divided by selling price (revenue) — it tells you what percentage of each sale is profit. Markup is profit divided by cost — it tells you how much you added on top of your cost. For example, if you buy something for $60 and sell it for $100, your profit is $40. Your margin is 40% ($40/$100) and your markup is 66.7% ($40/$60). Margin is always lower than markup for the same transaction.
How do I calculate gross profit margin?
Gross profit margin = (Revenue - Cost of Goods Sold) / Revenue x 100. For example, if you sell a product for $100 and it costs you $60 to make or purchase, your gross profit margin is ($100 - $60) / $100 x 100 = 40%. This means 40 cents of every dollar in sales is gross profit before operating expenses, taxes, and other costs.
What is a good profit margin?
Good profit margins vary significantly by industry. Grocery stores typically operate on 1-3% net margins. Retail clothing averages 4-13%. Software and SaaS companies can achieve 70-90% gross margins. Restaurants average 3-9% net margins. Service businesses often see 15-30% margins. Rather than targeting a universal number, compare your margins to industry benchmarks and focus on improving over time.
How do I convert between margin and markup?
To convert margin to markup: Markup = Margin / (1 - Margin). For example, a 40% margin = 0.40 / (1 - 0.40) = 0.667 = 66.7% markup. To convert markup to margin: Margin = Markup / (1 + Markup). For example, a 50% markup = 0.50 / (1 + 0.50) = 0.333 = 33.3% margin. This calculator shows both values simultaneously so you never need to convert manually.
What is break-even analysis?
Break-even analysis determines how many units you need to sell to cover all your costs — both the variable cost of producing each unit and your fixed costs like rent, salaries, and equipment. The break-even point in units = Fixed Costs / Profit per Unit. Below the break-even point you are losing money; above it, every additional unit sold is pure profit. Enter your fixed costs in this calculator to see your break-even point and track how close your current volume is.
Should I price based on margin or markup?
Most financial analysis uses margin because it directly shows what percentage of revenue is profit, making it easier to calculate profitability at scale. However, many retailers and wholesalers think in markup because it is simpler when setting prices — just add a percentage to your cost. The key is consistency: pick one method and use it across your business. This calculator shows both so you can see the full picture regardless of which method you prefer.