Profit Margin Calculator
Enter your cost and selling price to instantly see profit, margin percentage, and markup percentage.
Free Profit Margin Calculator
The SmarterSources Profit Margin Calculator helps business owners, freelancers, and entrepreneurs instantly determine how profitable their products or services are. Enter your cost and selling price to see profit in dollars, margin percentage, and markup percentage.
How to Calculate Profit Margin
Profit margin is calculated by dividing profit by revenue and multiplying by 100. The formula is: Margin = (Revenue - Cost) / Revenue × 100. For example, if you sell a product for $100 and it costs $60, your profit is $40 and your margin is 40%.
Margin vs. Markup
Margin and markup both measure profitability but from different perspectives. Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. A product with a 50% margin has a 100% markup. Understanding both helps with pricing strategy.
What Is a Good Profit Margin?
Good margins vary by industry. Retail typically sees 2-5% net margins. Software companies can achieve 20-40%. Service businesses often range from 15-30%. The key is to benchmark against your specific industry and aim for consistent improvement.
Frequently Asked Questions
What is profit margin?
Profit margin is the percentage of revenue that remains as profit after costs. A 40% margin means $0.40 of every dollar in revenue is profit.
What is the difference between margin and markup?
Margin = Profit / Revenue. Markup = Profit / Cost. A $40 profit on a $100 sale is a 40% margin but a 66.7% markup (since cost is $60).
Is my data safe?
Yes. This calculator runs entirely in your browser. No data is sent to any server and nothing is stored.