Profit Margin Calculator

Calculate profit or loss, profit margin percentage, and markup from cost and selling price.

Cost Price

Enter the amount paid or the total cost of the product or service.

Selling Price

Enter the price at which the product or service is sold.

Profit Margin Results

Cost Price

Selling Price

Profit / Loss

Profit Margin

Markup

What Is Profit Margin?

Profit margin shows how much of a product's or service's selling revenue remains after subtracting its cost. It is commonly expressed as a percentage of the selling price.

This calculator uses the cost price and selling price to calculate profit or loss, profit margin percentage, and markup percentage.

Profit Margin Formula

Profit = Selling Price − Cost Price

Profit Margin = (Profit ÷ Selling Price) × 100

Markup = (Profit ÷ Cost Price) × 100

Profit Margin Example

Suppose an item costs $60 and is sold for $100.

Profit = $100 − $60 = $40

Profit Margin = ($40 ÷ $100) × 100 = 40%

Markup = ($40 ÷ $60) × 100 = 66.67%

Therefore, the item produces a $40 profit, a 40% profit margin, and a 66.67% markup.

Profit Margin vs. Markup

Profit margin and markup measure profitability from different perspectives. Profit margin uses the selling price as its base, while markup uses the cost price.

Profit Margin % = (Profit ÷ Selling Price) × 100

Markup % = (Profit ÷ Cost Price) × 100

For example, a product costing $100 and selling for $125 has a 20% profit margin and a 25% markup.

What If There Is a Loss?

If the selling price is lower than the cost price, the calculation produces a negative profit and a negative profit margin. This indicates that the product is being sold for less than its stated cost.

Important: This calculator uses a basic profit-margin model based only on cost price and selling price. Actual business profitability may also depend on taxes, shipping, operating expenses, commissions, discounts, fees, overhead, and other costs.

Frequently Asked Questions

How do I calculate profit margin?

Subtract the cost price from the selling price to find the profit. Then divide the profit by the selling price and multiply by 100.

What is the difference between margin and markup?

Profit margin is based on the selling price, while markup is based on the cost price.

Can profit margin be negative?

Yes. If the selling price is lower than the cost price, the result represents a loss and the profit margin is negative.

Can the cost price be zero?

Yes. The calculator can calculate the profit margin when the cost price is zero. Markup is shown as N/A because markup requires a positive cost price as its denominator.