Complete guide
Margin calculator for profit, markup and target price
Enter revenue and cost to find profit, gross margin and markup, or enter cost and target margin to solve the required selling price.
Margin versus markup
Margin divides profit by revenue. Markup divides the same profit by cost, so the percentages differ whenever profit is nonzero.
Margin formulas
Gross profit is revenue less cost.
margin=(revenue−cost)/revenuemarkup=(revenue−cost)/costTarget selling price
To achieve a target margin, divide cost by one minus the margin decimal.
price=cost/(1−target margin)What cost should include
Use the cost definition relevant to the decision: product cost for gross margin, or a broader fully loaded cost for pricing analysis.
Limits of gross margin
Gross margin does not by itself show net profit. Payroll, rent, marketing, interest, taxes, returns and overhead can materially change the outcome.
Margin and equivalent markup
| Margin | Equivalent markup |
|---|---|
| 10% | 11.11% |
| 20% | 25% |
| 33.33% | 50% |
| 40% | 66.67% |
| 50% | 100% |
Frequently asked questions
Is margin the same as markup?
No. Margin uses revenue as denominator; markup uses cost.
How do I calculate gross profit?
Subtract cost from revenue.
How do I price for 40% margin?
Divide cost by 0.60.
Can margin exceed 100%?
A standard positive-cost sales margin cannot reach or exceed 100%.
Does gross margin equal net profit?
No. Net profit includes operating and other expenses.
What to keep in mind
Gross margin excludes operating expenses, financing, tax and other costs unless included in the cost input.
Results display up to 8 decimal places; exported numbers preserve calculation precision. This is a calculation summary, not an official certificate.