WorkedMathGlossary

Margin Calculator

Enter a cost and selling price to get the profit margin, the profit per unit, and the equivalent markup.

Profit Margin
33.33%
Profit $20 on $60 revenue
Markup (on cost)
50%
Profit per unit
$20

How to Calculate Profit Margin

Margin % = (selling price − cost) ÷ selling price × 100.

Worked example

A product that costs $40 and sells for $60.

Profit: 60 − 40 = $20

Margin: 20 ÷ 60 = 0.3333 = 33.33%

The same numbers as markup: 20 ÷ 40 = 50% — which is why the two are so often confused.

Frequently Asked Questions

How do you calculate profit margin?

Subtract the cost from the selling price to get the profit, then divide the profit by the selling price and multiply by 100. Margin is always a percentage of the price, not of the cost.

What is the difference between margin and markup?

Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. The same $20 profit on a $40 cost is a 50% markup but only a 33.3% margin, because the $20 is divided by $60 instead of $40.

How do I convert markup to margin?

Margin = markup ÷ (1 + markup), with both as decimals. A 100% markup (1.0) is a 1.0 ÷ 2.0 = 50% margin. Going the other way, markup = margin ÷ (1 − margin), so a 50% margin needs a 100% markup.

Can profit margin be over 100%?

No. Margin is profit divided by price, and profit can never exceed the price (that would need a negative cost), so margin tops out below 100%. Markup has no such ceiling, which is one way to tell the two apart when a number looks wrong.

Related Calculators

View all calculators →