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Profit Margin Calculator

Calculate gross profit, gross margin percentage, markup, net profit, and operating margin with full cost breakdown.

Quick Scenarios
Direct cost to manufacture or acquire one unit.
The price charged to the customer.
Desired profit margin percentage.
Indirect costs (marketing, shipping, software, rent).

Gross Margin is 40.00% with a 66.67% Markup.

For every $100.00 in sales, you keep $40.00 in gross profit and $25.00 in net profit after overhead.

Gross Profit $40.00
Gross Margin 40.00%
Markup Percentage 66.67%
Selling Price $100.00
Net Profit (After Overhead) $25.00
Net Margin 25.00%

GetCalcu Methodology & Editorial Standards

Every calculation formula on GetCalcu is peer-reviewed against official industry standards (CFPB, IRS Title 26, NIST, ISO 80000, and CDC guidelines).

Reviewed by: GetCalcu Editorial & Mathematical Board
Last Verified: September 2026
Accuracy Policy: In-browser deterministic computation
Feedback: Report an issue

Understanding Margin vs Markup in Business Pricing

Profit margin and markup are two related ways of measuring the profitability of a product or service, but they describe different ratios.

Margin vs Markup

Gross Margin is the percentage of selling price that is profit: (Price - Cost) / Price. Markup is the percentage added to the cost to get the price: (Price - Cost) / Cost. A 50% markup equals a 33.3% margin.

Gross vs Net Profit

Gross profit only accounts for direct product costs (COGS). Net profit subtracts all operating overhead including marketing, salaries, rent, and software fees.

How to Use the Profit Margin Calculator

  1. Step 1: Enter your unit Cost of Goods Sold (COGS).
  2. Step 2: Enter your Selling Price (or pick "Calculate Selling Price" with your target margin).
  3. Step 3: Add operating overhead to see your bottom-line Net Profit.
  4. Step 4: Review the gross margin, markup percentage, and profit breakdown.
Formula: Gross Margin = ((Revenue - Cost) ÷ Revenue) × 100 | Markup = ((Revenue - Cost) ÷ Cost) × 100 | Net Profit = Gross Profit - Operating Expenses

Real-World Worked Examples

Standard Retail Markup

Input: Cost: $50, Price: $100

Result: Gross Profit: $50 (50% Margin, 100% Markup)

Target 40% Margin Pricing

Input: Cost: $60, Target Margin: 40%

Result: Selling Price: $100 (Markup: 66.67%)

Frequently Asked Questions

What is a good profit margin?

A healthy gross margin varies by industry: e-commerce averages 35-50%, SaaS and software average 70-85%, while restaurants and grocery stores often operate at 10-25%.

Why is markup always higher than margin?

Because markup is calculated against the smaller cost base, while margin is calculated against the larger total revenue base.