Profit margin & markup calculator
Margin and markup are not the same thing, and confusing them is how businesses quietly underprice themselves for years.
Your numbers
Fill in any two of cost, price and margin. The rest works itself out.
Your pricing
How to use this profit margin & markup calculator
- Choose your currency and enter what it costs you.
- Enter what you charge, or the margin you want.
- Add your monthly units, then read your margin, markup and profit.
Who it is for
For shop owners, freelancers and e-commerce sellers setting prices, or working out whether they can afford to advertise.
Margin and markup are different numbers
Both describe the same profit. They just divide it by different things.
Buy for 600, sell for 1,000. Profit is 400.
- Margin = 400 ÷ 1,000 = 40%
- Markup = 400 ÷ 600 = 67%
Same transaction. Two very different-looking numbers. This is why a supplier saying "we work on 50%" and a client hearing "50%" can mean two prices hundreds apart.
The conversion table worth remembering
| To get this margin | You need this markup |
|---|---|
| 20% | 25% |
| 30% | 43% |
| 40% | 67% |
| 50% | 100% |
| 60% | 150% |
| 75% | 300% |
The trap: adding 50% to your cost does not give you a 50% margin. It gives you 33%. To get a genuine 50% margin you have to double the cost.
What counts as cost
For this to mean anything, cost must include everything that goes up when you make one more sale: materials, delivery, payment fees, contractor time, ad spend attributable to that sale. Leave your rent and software out — those are fixed costs, and they come out of the margin afterwards.
The most common underpricing mistake is not counting your own hours as a cost. If the business had to pay someone else to do what you do, that is a real number.
Why a small price rise does so much
At a 40% margin, a 10% price rise increases your profit by 25%. You could lose a fifth of your customers and still be ahead. Very few people test this, and almost everyone who does is surprised.
Common questions
How do I calculate profit margin?
Subtract the cost from the price, then divide by the price and multiply by 100. An item costing 60 and selling for 100 has a 40% margin and a markup of about 67%.
Which should I use when quoting?
Think in margin, because margin is what actually pays your bills. Use markup only when you are working from a supplier cost and need a quick price.
What is a good margin?
It varies enormously. Retail often runs 20–40%, services 40–70%, software higher still. The useful test is whether the margin covers your fixed costs and still leaves a profit, not whether it matches an industry average.
Should ad spend be a cost?
Yes, if you are pricing a specific sale that ads brought in. If you would rather see it separately, leave it out here and check the break-even ROAS calculator instead.
Why does the break-even row assume 10,000 of fixed costs?
It is a round illustration so you can see how many sales it takes to cover overheads. Divide your real monthly fixed costs by the profit per sale to get your own figure.
Need more customers as well?
This tool is free and always will be. If you also want ads, search and follow-up that bring in customers, I offer a free 45-minute consultation for businesses in the USA, UK, UAE, Australia and India.
Book a free consultationBuilt and maintained by Premkumar Ragav, an independent performance marketing specialist. Updated November 2026.